For most investors, a sharp selloff is a reason to stay on the sidelines. But for Cathie Wood, the famous investor behind Ark Invest, it’s an opportunity to increase exposure to disruptive innovators when market sentiment turns negative.
As markets become more wary of Elon Musk’s companies — Tesla (TSLA) and SpaceX (SPCX) — Ark Invest has once again stepped in to buy the dip. As of July 27, disclosures revealed that several Ark Invest exchange-traded funds (ETFs) had purchased roughly $23 million worth of shares in both companies.
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Wood appears convinced that the market is focusing too heavily on near-term challenges while overlooking their long-term potential. But should investors follow her lead?
Tesla's Weak Q2 Hasn't Changed Ark Invest's Long-Term View
TSLA stock has faced a brutal year, down roughly 30% year-to-date (YTD), as investors have become increasingly cautious of whether CEO Elon Musk's bold artificial intelligence (AI) vision can justify its sky-high valuation. Furthermore, Tesla's second-quarter earnings report disappointed investors as profit margins suffered despite core automotive revenue improving.
www.barchart.com Tesla delivered 480,126 vehicles during the quarter, while automotive revenue climbed 23% year-over-year (YOY) to $20.5 billion and total revenue increased 26% to $28.2 billion. However, automotive gross margin excluding regulatory credits fell from 19.2% in Q1 2026 to 16.3% in Q2 2026. Adjusted EPS declined 18% YOY to $0.33, while total GAAP gross margin slipped sequentially from 21.1% to 16.8%.
Even so, Tesla isn’t shying away from spending aggressively to build its AI future. Capital expenditures climbed to $5.8 billion in Q2, resulting in negative free cash flow of -$1.1 billion. The company now expects annual capital spending to exceed $25 billion as it expands its Robotaxi fleet, scales Optimus production, increases AI computing capacity, builds semiconductor manufacturing facilities, and invests in next-generation factories. For investors, the concern now is when these projects will start generating meaningful profits.
Cathie Wood, however, is looking beyond the short-term performance and purchased 27,864 of Tesla’s shares worth $8.7 million. Currently, Tesla stock holds a 7.4% weight in Wood’s combined ETF portfolio. Ark Invest has consistently argued that Tesla should be valued as an AI, autonomous driving (AD), and robotics company rather than solely an electric vehicle (EV) manufacturer.
On Wall Street, TSLA stock has a consensus “Moderate Buy" rating overall. Of the 42 analysts covering the stock, 15 recommend a “Strong Buy,” two have a “Moderate Buy,” 20 have a “Hold" rating, and five have a “Strong Sell.” The average price target of $401.29 indicates potential upside of 29% from current levels. The high price estimate of $600 implies that TSLA stock could rise as much as 93% over the next 12 months.
www.barchart.com Cathie Wood Remains Bullish on SpaceX
Tesla isn't the only Elon Musk-led company receiving fresh capital from Cathie Wood. Ark Invest also recently increased its investment in SpaceX despite the aerospace company's own difficult trading period since its highly anticipated initial public offering (IPO) on June 12. Like other high-growth tech stocks, SPCX stock has retreated 52% from its post-IPO highs as investors have reassessed its lofty valuation.
www.barchart.com Wood took advantage of this opportunity and purchased 124,543 shares of SpaceX shares worth $14.3 million. Currently, SpaceX holds a 4.2% weight across Ark Invest's ETFs, as the investment firm sees multiple long-term growth engines operating simultaneously.
According to a U.S. Securities and Exchange Commission (SEC) filing, SpaceX generated $18.7 billion in revenue in 2025, an increase of 33% YOY. The company's rapidly growing Connectivity segment — led by Starlink, one of the world's fastest-growing satellite internet networks — has become its largest and most profitable business. Furthermore, for the three months ended March 31, 2026, SpaceX generated $4.69 billion in revenue while incurring a $1.94 billion operating loss.
Despite the losses, Wood sees a company investing aggressively to build multiple long-term growth engines. The Connectivity segment generated revenue of $11.4 billion in 2025, an increase of 50% YOY, while also generating operating profit of $4.4 billion. Starlink continues to produce significant earnings, while Starship, AI infrastructure, and future space technologies are additional opportunities yet to generate meaningful financial returns.
SpaceX's upcoming Q2 report, scheduled for Aug. 4, will mark its first quarterly earnings release since its IPO. That makes the report a crucial test of whether the company's strong growth story can begin translating into results as a publicly traded company. Investors should watch out for management's outlook on AI infrastructure, Starlink, launch services, and capital spending.
On Wall Street, SPCX stock has a consensus “Moderate Buy" rating. Of the 33 analysts covering the stock, 22 recommend a “Strong Buy,” two have a “Moderate Buy” rating, eight have a “Hold,” and one analyst has a “Moderate Sell.” The average target price of $228.06 indicates potential upside of 110% from current levels, while the high price estimate of $800 implies that SpaceX can rise by 638% in the next 12 months.
www.barchart.com On the date of publication, Sushree Mohanty did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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