Cathy Wood bets on SpaceX against Tesla: ARK's strategic pivot
On June 12, the day of the long-awaited SpaceX IPO, Cathie Wood made a powerful move, reshuffling the portfolio of her flagship ARK fund. The focus is on purchasing approximately $444 million worth of SpaceX shares while simultaneously reducing her position in Tesla. Both companies are Elon Musk's creations, but the priority shift has been dramatic.
On the day of the listing, SpaceX acquired 3.29 million shares at a price of $135 each. By the close of trading, the stake was worth $529.7 million — a 19% increase in a single day. This pushed Musk's net worth above $1 trillion for the first time. Concurrently, ARK cut its stakes in Tesla, Advanced Micro Devices, Rocket Lab, Roku, and Baidu, reallocating capital in favor of the space giant.
Why is Wood changing course?
Tesla has long been the anchor of ARK, but the situation has changed. Chinese competitors have nearly caught up with the American manufacturer, its profitability is declining, and Musk's political activity is alienating some consumers. Meanwhile, SpaceX, especially through its rapidly growing Starlink division, is showing entirely different dynamics. Starlink is the company's only profitable segment, and it is expanding at explosive rates.
Wood first invested in SpaceX back in late 2023 as part of a venture round. Now, after the public market debut, the fund can increase its stake directly. Currently, SpaceX is the largest position in ARK's venture portfolio, valued at approximately $1 billion.
Context for ARK: A bet on risk or a rescue?
Since the start of the year, the ARK Innovation ETF has grown only 1.61%, while the S&P 500 has gained about 9%. Over the past 12 months, investors have withdrawn approximately $294 million in net funds from the fund. According to Morningstar, from 2014 to 2024, ARK "destroyed" about $7 billion in investor capital. Against this backdrop, the bet on SpaceX looks like an attempt to restore confidence and find a new growth driver.
Wood is following a proven pattern: entering promising companies at early stages. This was the case with Coinbase after its listing in 2021 and more recently with CoreWeave. Now, SpaceX is the most ambitious asset.
My analysis: Wood's decision is not just hedging but a deliberate shift in investment philosophy. Tesla has ceased to be an unconditional leader in ARK's eyes, making way for SpaceX, which holds a monopoly advantage in space infrastructure. However, it is important to remember: SpaceX's cumulative loss as of the end of March was $41.3 billion. Will the company turn profitable and allow for stable earnings — or will it become another costly mistake for ARK? Only time will tell.