Tesla or CoreWeave: Cathie Wood Slashes One Top AI Stock While Boosting Another

2025 is coming to an end with uncertainty having gripped the markets lately. Fears of an AI bubble are fueling the concerns, while a mix of conflicting economic signals, stretched valuations, and an ongoing, complicated geopolitical backdrop have all left investors wondering whether the bull market is set to continue in 2026.

But never one to shy away from risk, Cathie Wood believes that against such a jittery backdrop, plenty of opportunities could open up for investors.

“I have never seen more fear about innovation than I do now,” the Ark Invest CEO recently said. “And that’s why, in April, when we went through tariff turmoil, a lot of the AI stocks got hit. And it’s why, when DeepSeek came out from China, a lot of the AI-related stocks got hit. So we are not in a hype cycle, and I’m very comfortable here. I think this is a good place. A wall of worry makes for a very strong and, from my point of view, durable bull market, which means you buy the dip. You don’t chase momentum; you buy the dip because you get these opportunities.”

While Wood strikes a bullish tone, that’s not to say she is just randomly picking up any AI name out there. Both Tesla (NASDAQ:TSLA) and CoreWeave (NASDAQ:CRWV) are among the AI stocks residing in the Ark portfolio, but in recent times Wood has been offloading one of these while loading up on the other.

Do the Street’s top analysts agree with the innovation-focused CEO’s latest moves? We’ve opened up the TipRanks database to find out.

Tesla

You wouldn’t really dare call any other automaker an AI stock, but Tesla is obviously a different beast. It’s an argument that has been debated on Wall Street for years – is the Elon Musk-led firm a tech play rather than merely a seller of cars with some extra trimmings?

It’s certainly – and famously – not valued as one. The bulls will say it deserves to have what many consider to be a ridiculous valuation due to its software stack, data advantage, and ambitions in autonomy, robotics, and energy, all providing evidence that the car business is really just a gateway to a much broader technology platform. Skeptics counter that by simply pointing out that the bulk of revenue and cash flow still comes from selling vehicles, leaving Tesla exposed to the same pressures and competitive dynamics as the rest of the auto industry.

And on that side, it has definitely been a rocky year. The first half of 2025 saw a sharp decline in car sales, and although Q3 marked a rebound, that was largely driven by the Trump administration’s decision to end the $7,500 federal EV tax credit at the end of September.

Yet, that has mattered little to investors, it seems. While the stock took a beating earlier in the year, it recently surged to all-time highs, with the market banking on the success of the company’s autonomous endeavors.

As for Cathie Wood, she has never been shy about her Tesla conviction. Earlier this year, she went as far as saying that if she could own just one stock, it would be TSLA. But after the stock’s run, that unwavering enthusiasm may be cooling. Between November 21 and December 18, Wood trimmed ~$143 million worth of Tesla shares via her ARKK and ARKW ETFs.

Meanwhile, when assessing TSLA’s value proposition, Morgan Stanley’s Andrew Percoco – an analyst ranked among the top 3% on Wall Street – believes a more cautious stance is warranted at this point.

“Tesla is a clear global leader in electric vehicles, manufacturing, renewable energy, and real world AI and thus deserving of a premium valuation. However, high expectations on the latter have brought the stock closer to fair valuation. While it is well understood that Tesla is more than an auto manufacturer, we expect a choppy trading environment for the TSLA shares over the next 12 months, as we see downside to estimates, while the catalysts for its non-auto businesses appear priced at current levels, driving our EW rating,” the 5-star analyst said.

That Equal-weight (i.e., Neutral) rating is backed by a $425 price target, implying TSLA shares will fall by ~12% in the months ahead. (To watch Percoco’s track record, click here)

The broader Street largely echoes that cautious tone. Tesla currently carries a Hold consensus rating, with analysts split almost evenly between 11 Buys and 12 Holds, alongside 9 Sells. Meanwhile, the average price target of $382.87 points to a 20% downside over the next 12 months. (See TSLA stock forecast)

CoreWeave

Tesla has been a controversial name on Wall Street for years now, but it hasn’t taken CoreWeave long to become one, too. The AI infrastructure company only became a public entity at the end of March, making a big splash upon entering the markets, given its positioning in the data center world and the backing of AI lord Nvidia.

The company was established in 2017 under the name Atlantic Crypto, initially focused on Ethereum mining using GPUs. In 2019, it rebranded as CoreWeave and repurposed its GPU infrastructure for visual effects rendering before later expanding into AI workloads, taking advantage of rising demand for GPU compute.

Today, CoreWeave is the biggest pure-play, AI-native data center operator, boasting more than 41 AI-optimized data centers, over 2.2 GW of contracted power capacity, and more than $56 billion in AI compute backlog. The company offers a full-stack GPU cloud platform spanning HPC, rendering, machine learning training and inference, and specialized workloads including visual effects, life sciences, and genAI.

So why is the name controversial? That’s down to several reasons. The company has taken on substantial debt to fund the rapid buildout of its data center footprint and continues to report sizable net losses alongside negative free cash flow, fueling uncertainty around its long-term financial state and ability to reach profitability. In addition, CoreWeave relies on GPU-backed financing, using its Nvidia GPUs as collateral for high-interest borrowing, a structure some view as risky given the pace at which hardware can depreciate as newer, more capable chips enter the market.

The risks involved, along with the market’s recent skepticism toward AI-related names, have driven a massive sell-off in the stock, with shares now sitting 55% below June’s highs – even after factoring in Friday’s ~23% jump.

Wood evidently senses an opportunity here. Between November 21 and December 15, she scooped up ~$94.5 million worth of CRWV shares across her ARKK and ARKW ETFs.

And Wood isn’t the only one seeing upside. Roth Capital analyst Rohit Kulkarni likewise views the company as a compelling vehicle for investors looking to tap into AI.

“CoreWeave is emerging as one of the most consequential yet controversial companies in the AI infrastructure stack, and arguably the best pure-play AI-native vehicle for investors looking to participate in the multi-trillion-dollar secular AI expansion over the next decade,” the 5-star analyst said. “The company sits at the center of the GPU supply-demand imbalance, scaling faster than any other independent cloud provider… we see highly asymmetric risk/reward and minimal N-T execution risk on CRWV shares.”

Kulkarni, who ranks among the top 4% of Street stock experts, rates the shares a Buy while his $110 price target points toward 12-month returns of ~33%. (To watch Kulkarni’s track record, click here)

Elsewhere on the Street, CRWV stock claims an additional 11 Buys, 9 Holds, and a single Sell, all adding up to a Moderate Buy consensus rating. There are ample gains projected here; at $133.20, the average price target implies shares will climb 60% higher over the one-year timeframe. (See CRWV stock forecast)

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.