Cathie Wood Just Bought the Dip in SpaceX Stock. Should You?
Key Points
Ark Invest bought more than 3 million shares of SpaceX on its IPO day.
In recent trading sessions, SpaceX stock has been losing momentum -- falling closer to its IPO price.
Wood recently added SpaceX to four of Ark's funds as the stock continued selling off.
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Ark Invest CEO Cathie Wood has once again placed an aggressive bet on a company led by Elon Musk. On June 12, Wood's investment firm bought 3.3 million shares in the Space Exploration Technologies (NASDAQ: SPCX) IPO across several of the firm's exchange-traded funds (ETFs).
Just 10 days later, Ark added another 210,121 shares across the Ark Innovation (NYSEMKT: ARKK), Ark Autonomous Technology & Robotics (NYSEMKT: ARKQ), Ark Next Generation Internet (NYSEMKT: ARKW), and Ark Space & Defense Innovation (NYSEMKT: ARKX) funds as SpaceX stock lost some momentum. These purchases reflect Wood's signature style of doubling down on long-term technological disruption during periods of short-term weakness.
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Let's see whether smart investors should follow Wood's lead and buy the dip in SpaceX stock right now.
Image source: Getty Images.
Breaking down Ark's SpaceX position
SpaceX now appears across four of Ark's ETFs. On June 12, ARKK acquired 1,690,839 shares, ARKQ bought 736,442 shares, ARKW added 325,562 shares, and ARKX purchased 538,341 shares. On June 22, the buying continued across all four of these funds.
The consistent presence of SpaceX across ARKK, ARKQ, ARKW, and ARKX suggests that Wood is spreading exposure while still concentrating capital among her highest-conviction names.
Why did Cathie Wood buy the dip in SpaceX stock?
Wood's decision to purchase SpaceX stock both on its IPO day and after the sell-off likely stems from her long-standing admiration for Musk's ability to execute ambitious visions in capital-intensive industries. For years, Wood has repeatedly expressed an abnormally high conviction in Tesla (NASDAQ: TSLA) -- maintaining a large position in the electric vehicle (EV) stock through multiple drawdowns. Wood believes that Tesla will ultimately come to dominate autonomous transportation through its robotaxi program.
At its core, Tesla represents the kind of step-change technology Wood seeks in her portfolio. SpaceX fits the same pattern. Reusable rockets, low-orbit satellite constellations, and an aggressive expansion into artificial intelligence (AI) infrastructure could unlock trillions in economic value over the coming decades.
When SpaceX sold off after the initial IPO pop, Wood appears to have viewed the weakness as an opportunity to buy shares at a lower valuation, rather than as a signal to retreat. Ark's history shows that it's willing to tolerate volatility in growth stocks, as long as the underlying innovation thesis remains intact.
Should you buy the dip in SpaceX stock?
Retail investors considering following Wood's lead must weigh both the pros and cons of investing in SpaceX stock right now. On the positive side, Wood's early and persistent Tesla position has delivered multibagger returns as she stayed the course for many years. Given SpaceX's competitive edge in launch and satellite services, buying shares after an IPO-related sell-off could capture value if the company's long-term narrative holds.
However, Ark funds themselves have experienced sharp drawdowns when sentiment around concentrated bets sours.
ARKK data by YCharts.
SpaceX carries unique risks related to the regulatory environment, competition from other launch providers, and execution challenges on ambitious AI-related timelines. Investors who lack Wood's research resources, multi-year time horizon, and tolerance for double-digit percentage swings may find it more prudent to gain indirect exposure through diversified space or technology-themed funds, rather than replicating the exact Ark playbook.
Ultimately, mirroring any single money manager's concentrated position requires matching both their conviction and their risk tolerance. In my eyes, the better play right now is to let SpaceX's volatility play out and watch from the sidelines. Investors will have many more opportunities to buy company shares, both directly and indirectly through passive funds, over time.
Should you buy stock in Space Exploration Technologies right now?
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Adam Spatacco has positions in Tesla. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.
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