Cathy Wood reshuffles portfolio: SpaceX takes priority, Tesla takes a back seat
June 12 became a landmark date for the market: on the day of SpaceX's public listing, its founder Elon Musk officially crossed the $1 trillion net worth mark for the first time. On the same day, ARK Invest, the asset management firm led by Cathie Wood, made a major shift in its portfolio. The fund purchased 3.29 million shares of SpaceX at the listing price of $135 per share, spending approximately $444 million. By the close of the trading session, this stake was already valued at $529.7 million — a 19% increase in a single day.
At the same time, ARK reduced its positions in Tesla, as well as in Advanced Micro Devices, Rocket Lab, Roku, and Baidu. This is not a spontaneous decision but a clear signal of shifting priorities. If Tesla was once the anchor of Wood's portfolio, the bet is now on space expansion.
Why is Tesla losing ground in ARK's eyes?
Tesla shares have long been ARK's main asset, and Cathie Wood publicly supported the company even during its toughest times. However, the situation has now changed dramatically. Chinese competitors, such as BYD, have nearly caught up with Tesla in terms of production volumes and technology. The profitability of the American giant is declining, and Elon Musk's political activities are alienating part of its loyal audience. Under these conditions, holding a large stake in Tesla has become risky.
The picture is the opposite with SpaceX. The company's only profitable segment — Starlink satellite internet — is experiencing explosive growth. ARK's investments in SpaceX began as early as late 2023, and the company has now become the largest position in the fund's venture portfolio, valued at approximately $1 billion. After the IPO, the fund can increase its investments on the public market, opening up new horizons.
ARK's return context: a game of anticipation
Since the beginning of the year, the ARK Innovation ETF has grown by only 1.61%, while the S&P 500 has gained about 9%. Over the past 12 months, investors have withdrawn approximately $294 million net from the fund. According to Morningstar estimates, from 2014 to 2024, ARK "destroyed" about $7 billion of its investors' funds. This suggests that Cathie Wood's strategy, based on early entry into promising companies, has yet to deliver the expected returns.
In the IPO sector, Wood follows a single playbook: enter promising companies as early as possible. This is how ARK bought Coinbase shares shortly after its listing in 2021 and recently bet on CoreWeave. However, SpaceX has become the largest investment. The question is whether the company will achieve stable profitability and allow ARK to profit, or whether this will become another costly mistake.
My view: The flow of capital from Tesla to SpaceX is not just diversification but a bet that the space economy will become a new growth driver. However, given SpaceX's losses of $41.3 billion and the high risk, this move could prove either brilliant or fatal. Time will tell whether Starlink lives up to expectations.