Tesla Inc. (NASDAQ:TSLA) CEO Elon Musk has endorsed Cathie Wood-led ARK Invest's $5 trillion valuation forecast for the electric vehicle manufacturer, suggesting it may be conservative. Musk made these remarks during Tesla's second-quarter earnings call on Tuesday.

What Happened: During Tesla's second-quarter earnings call, Musk said, "ARK Invest thinks, on the order of $5 trillion, I think they are probably not wrong. And long-term Optimus, I think, it achieves a valuation several times that number."

He further estimated potential demand for humanoid robots could exceed 20 billion units globally, covering both consumer and industrial applications. "There are 8 billion people on earth. So it's 8 billion right there. Then you've got all of the industrial uses, which is probably at least as much, if not, way more. So I suspect that the long-term demand for general-purpose humanoid robots is in excess of 20 billion units," Musk said.

This alignment between ARK's analysis and Musk's vision highlights Tesla's commitment to diversifying beyond electric vehicles into AI and robotics.

As Tesla continues to develop its humanoid robot, Optimus, with plans for limited production starting next year, investors and industry watchers will closely monitor whether this bold vision can translate into reality.

Why It Matters: Earlier this year, Wood, CEO of ARK Invest, reaffirmed her bullish stance on Tesla despite a sharp downturn in its stock price. Wood emphasized the transformative potential of autonomous taxi networks, predicting a turnaround driven by these innovations.

In February, Wood reaffirmed her projection that her favorite electric vehicle company could reach $2,000 within five years, noting plans to revise the target. This valuation would imply a market capitalization exceeding $5 trillion for Tesla.

During the second-quarter results, Tesla reported a revenue of $25.5 billion, surpassing Street consensus estimates. However, the company's EPS, operating margins, and free cash flow fell short of expectations, leading to a decline in Tesla's stock.

Musk discussed various operational aspects, including a delay in the robotaxi project and the potential postponement of the Mexican Gigafactory due to tariff concerns.

Gene Munster, a tech analyst at Deepwater Asset Management, highlighted Musk's strong conviction regarding vehicle autonomy. Musk stated that those who do not believe in Tesla's ability to solve vehicle autonomy should not hold its stock.

Price Action: Tesla's stock closed at $246.38 on Tuesday, down 2.04% for the day. In after-hours trading, the stock fell further 7.77%. Year to date, the stock has declined 0.82%, according to data from Benzinga Pro.

• Tesla Q2 Earnings Highlights: Revenue Beat, EPS Miss, Robotaxi Update, 2024 Growth Rate To Be 'Notably Lower' Than 2023

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.