Tesla Inc. (NASDAQ:TSLA) has climbed to become the third-largest holding at The Future Fund LLC, behind NVIDIA Corp. (NASDAQ:NVDA) and Alphabet Inc. (NASDAQ:GOOGL) (NASDAQ:GOOG), managing partner Gary Black announced Monday on X.

What Happened: The position shift comes after Tesla's recent challenges, including a fourth-quarter delivery miss of 495,570 vehicles against analyst expectations of 506,763, marking the company's first annual sales decline.

Black, who faced criticism from Tesla bulls for trimming the position at $351 in late 2024, has maintained a disciplined investment approach. "That's what professional investors do – buy low, sell high," Black stated on Nov. 25, noting his fund's average purchase price of $162 and selling price of $252 since early 2023.

The Future Fund Active ETF (NYSE:FFND) began reducing its Tesla exposure in the fourth quarter of 2022 when it represented 12.2% of the portfolio, following Tesla's 20% EV price cuts. The position recently stood at 5.07% with 834 shares valued at $342,306, according to the fund's Jan. 6 holdings update.

Why It Matters: Looking ahead, Black maintains a $380 price target for Tesla, citing potential catalysts including a new $25,000-$30,000 vehicle launch in early 2025. However, he warns about risks such as the possible elimination of the $7,500 EV tax credit, noting significant sales declines in European markets after similar credit removals.

The repositioning occurs amid intense debate over Tesla's future, with analysts divided on the company's autonomous driving and robotics ambitions. While some analysts project an optimistic $2 trillion valuation by 2025, critics like GLJ Research CEO Gordon Johnson remain skeptical, particularly regarding Tesla's robotics program.

Tesla's stock, despite recent volatility, maintained approximately 62% gains through 2024, even as it underperformed the NASDAQ 100 index by 32 percentage points over the previous three years.

Price Action: Tesla's stock closed at $411.05 on Monday, gaining 0.15% for the day. In after-hours trading, the stock dipped slightly by 0.13%. Over the past year, Tesla's stock has seen a significant increase of 70.95%, according to data from Benzinga Pro.

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