Cathie Wood’s ARK Invest predicts Tesla stock will surge 1,350% over the next five years. Elon Musk says it’s an ‘extremely challenging, but achievable’ target

Bill Gates once famously said people tend to overestimate the amount of change that can occur in one year, but underestimate the amount of change that can occur over 10 years. It’s a cliché, known as Gates’ law, that ARK Invest and its CEO, Cathie Wood, need to be true if their lofty price target for Tesla is to become reality.

ARK analysts, led by Tasha Keeney, put out a report detailing their latest bullish prediction for Elon Musk’s EV giant on Wednesday. It argues Tesla shares will skyrocket roughly 1,350% to $2,600 by 2029—and robo-taxis are key to the optimistic thesis. “ARK estimates that nearly 90% of Tesla’s enterprise value and earnings will be attributed to the robo-taxi business in 2029,” Keeney and her team wrote.

Of course, Tesla hasn’t launched a robo-taxi business just yet. But ARK says it’s all but guaranteed to roll out soon. “We believe that Tesla will launch a robo-taxi service within the next two years, and that the probability Tesla fails to launch a robo-taxi service within five years is de minimis,” Keeney and her team explained, noting that Tesla has said it will unveil its robo-taxi app and prototype at an Aug. 8 event.

But what if Tesla doesn’t expand its robo-taxi network in time, because of difficulties gaining regulatory approval or for any number of other reasons? Well, then ARK’s analysts are far less bullish. They say Tesla could launch a “human-driven” ride-sharing business to compete with the likes of Uber, but that wouldn’t boost share prices in the same way robo-taxis could. “While unlikely, if we were to eliminate the possibility of a robo-taxi network from our model, our price target would be ~$350,” Keeney and her team admitted Wednesday.

That means Tesla shares could surge 1,350% over the next five years—or a far less staggering 95%—and it all depends on the success of the robo-taxi business, at least according to ARK Invest and CEO Wood. However, the ARK Invest team doesn’t include this scenario in their bear case outlook, which still foresees Tesla shares rising to $2,000 by 2029.

ARK’s bullish outlook also features some serious vehicle production increases at Tesla. Keeney and her team expect the EV giant to raise production by 45% each year through 2029. In the first quarter, Tesla’s vehicle production fell 1.7% from a year ago to 433,000 as EV demand slowed. But ARK says the rollout of a robo-taxi business will lead to significant sales growth as robo-taxi “fleet owners” begin to buy Tesla’s new EVs. “Robo-taxis likely ease manufacturing scaling by simplifying vehicle designs as well as generating additional capital from highly cash-flow-generative rides,” they added.

While ARK’s latest forecast for Tesla shares may seem overly optimistic, Wood and her team have a track record of making prescient, out-of-consensus calls. In 2018, for example, Wood shocked Wall Street by predicting Tesla shares would surge 1,200% to $4,000 by 2023. At the time, the EV giant was struggling to scale the production of its Model 3, and Elon Musk noted in a conference call that Apple’s Tim Cook had even approached him about buying the company.

But Tesla ultimately made it through that dark time, and Wood’s seemingly wild prediction came true, with Tesla shares hitting the split-adjusted $4,000 equivalent in January 2021. Now, Wood is predicting another run of good form at Tesla, and she noted the outlook doesn’t even include any revenue from the potential release of Tesla’s Optimus personal robot, which could be substantial.

“Our research suggests that generalizable humanoid robots represent a ~$24 trillion global revenue opportunity at scale, ~50% in manufacturing. Should it decide to sell Optimus externally, Tesla could capture a significant share of this multitrillion-dollar market,” ARK’s analysts argued.

Tesla CEO Elon Musk also responded to ARK’s forecast on X Wednesday, calling it “extremely challenging, but achievable.”

This story was originally featured on Fortune.com