Cathy Wood reshuffles her portfolio: SpaceX vs Tesla — a new direction for ARK Invest
On June 12, the day of SpaceX's long-awaited stock market debut, Cathie Wood made a landmark move. Her ARK fund purchased shares of the space giant for approximately $444 million, while simultaneously reducing its position in Tesla. This step is not just a rebalancing, but a clear signal of shifting priorities within Elon Musk's empire.
On the day of the IPO, SpaceX shares surged 19%, and Musk's wealth exceeded the $1 trillion mark for the first time. ARK bought 3.29 million shares at the offering price of $135, and by the close of trading, this stake was worth $529.7 million. On the same day, the fund cut its holdings in Tesla, as well as in Advanced Micro Devices, Rocket Lab, Roku, and Baidu.
Why Tesla is losing ground in Wood's portfolio
For a long time, Tesla shares were a cornerstone of ARK's strategy. Cathie Wood publicly supported the company even during its toughest times. But now the situation has changed dramatically. Chinese competitors — BYD and Nio — have nearly caught up with Tesla in terms of sales volume and technology. Tesla's own profitability is declining, and Musk's political activity is starting to alienate some consumers. This is a classic signal for risk reassessment.
Against this backdrop, SpaceX looks like a much more promising asset. The company's only profitable division — Starlink satellite internet — is showing explosive growth. Cathie Wood first invested in SpaceX back in late 2023, and now this company has become the largest position in ARK's venture portfolio (about $1 billion). After the IPO, the fund can increase its investments on the public market, opening up new opportunities for scaling.
ARK's performance context: a bet on the future or a risky move?
Since the start of the year, the 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 Over the past 12 months, investors have withdrawn approximately $294 million in net funds from the fund.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. This is a troubling signal, but Wood continues to follow her strategy — entering promising companies as early as possible.
This was the case with Coinbase, purchased shortly after its listing in 2021, and with CoreWeave. Now SpaceX has become the largest investment. The only question is whether the space giant will live up to expectations or become another costly mistake. Time will tell, but it is already clear: Cathie Wood is betting that the future lies in space, not in electric vehicles.
My analysis: The capital flow from Tesla to SpaceX is not just a reaction to market conditions, but a strategic shift. Tesla faces growing competition and declining margins, while SpaceX, thanks to Starlink and government contracts, has a more stable and diversified cash flow. For ARK, this could be a lifeline if the space sector continues to grow at such a pace.