Kathy Wood shifted from Tesla to SpaceX: an analysis of ARK's strategy on the day of the historic IPO
June 12, 2025, became a landmark day for everyone tracking the innovation market. On the day of SpaceX's public listing, Cathie Wood, who manages ARK Invest funds, executed a major portfolio rebalancing. The focus of my analysis is a clear signal: Wood is betting on space while reducing positions in Tesla.
On the IPO day, ARK purchased 3.29 million shares of SpaceX at the offering price of $135. By the close of the trading session, the value of this stake had soared to $529.7 million — a 19% increase in a single day. Simultaneously, the fund cut its stakes in Tesla, Advanced Micro Devices, Rocket Lab, Roku, and Baidu. This is not a coincidence, but a well-thought-out strategy for capital reallocation.
Why is Wood swapping Tesla for SpaceX?
Tesla has been a cornerstone of the ARK portfolio for years. However, the situation is now changing. Chinese competitors have nearly caught up with Musk's company in electric vehicle production, profitability is declining, and Elon Musk's political activity is alienating some conservative investors. On the other hand, SpaceX is a growth story where the only profitable division, Starlink, is showing explosive momentum. ARK's venture portfolio already values its stake in SpaceX at approximately $1 billion, and now the fund can increase its investments on the public market.
Context of ARK's returns
Since the start of the year, the flagship ARK Innovation ETF has risen 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 Over the past 12 months, investors have withdrawn approximately $294 million in net funds from the fund.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 estimates, from 2014 to 2024, ARK "destroyed" about $7 billion of its investors' capital. Wood is following a classic pattern: entering promising companies as early as possible. This was the case with Coinbase in 2021 and CoreWeave. Now, SpaceX has become the largest holding.
My expert view: The capital shift from Tesla to SpaceX is not just diversification, but a recognition that Musk's future growth lies not in cars, but in space technology and global internet. However, the open question remains: can SpaceX, with a cumulative loss of $41.3 billion as of March, become consistently profitable and justify such high expectations, or is this another costly mistake by ARK? Time will tell, but the bet is a big one.