ARK Invest, the investment management firm led by the influential Cathie Wood, has divested over $7.3 million worth of Tesla shares. The move follows a downgrade by Goldman Sachs – the fourth such downgrade for the electric vehicle (EV) manufacturer this month.

On Wednesday, ARK’s daily trading notifications showed that two of its exchange-traded funds (ETFs) sold a combined 28,368 Tesla shares. Specifically, the ARK Autonomous Technology & Robotics ETF parted with 17,967 shares, while the ARK Next Generation Internet ETF sold 10,401 shares.

ARK's Divestment Amid Analysts' Downgrades

This latest divestment brings ARK funds' total Tesla shares sold in June to over half a million. The sales come amid a flurry of downgrades for Tesla by major market analysts. Goldman Sachs is the latest to join the fray, which also includes Morgan Stanley and Barclays. Last week, analysts at Morgan Stanley and Barclays downgraded the Elon Musk-led company’s stock to equal weight.

However, despite the downgrades, Tesla's price target was revised upwards to $248 per share from a previous $185. This adjustment reflects increased earnings-per-share estimates and a higher target multiple.

Shifting Investment Strategy

Interestingly, while ARK funds have been lightening up on Tesla, ARK's technology ETF has been on a shopping spree for Advanced Micro Devices (AMD), purchasing 4,576 shares worth over $500,000 based on the day’s closing price of $110.17.

Goldman Sachs, despite the downgrade, remained optimistic about Tesla’s long-term growth and competitive edge. The bank acknowledged Tesla's remarkable stock rally of 108% since the beginning of the year as reflective of the firm’s overall bullish sentiment.

Tesla's Stock Roller Coaster

Tesla’s shares have experienced a roller-coaster ride in the market, with the stock taking a tumble in the last five days after an impressive 13-day winning streak on Wall Street. This rally resulted in an approximately 23% surge in stock value over the last 30 days.

Goldman Sachs attributed much of its downgrade to valuation concerns, and also spotlighted the challenging pricing environment for new electric vehicles.

Market analysts predict that the pricing headwinds for electric vehicles will negatively impact Tesla’s non-GAAP gross margin in 2023.

Investors’ Watchful Eyes

Investors and market watchers are keeping a close eye on the evolving landscape of the electric vehicle industry and the investment strategies of influential players like ARK Invest.

As Tesla navigates the volatile market conditions and analysts' shifting sentiments, its performance in the coming months will be under intense scrutiny. Additionally, ARK Invest's strategic moves will also be monitored for indications of broader trends in technology and EV investment.