Cathie Wood's Ark Bought $21.3 Million of SpaceX Stock as Shares Fell 45% From Their Record High. Wall Street's Median Price Target Is $243.81, 111.5% Above the Current Close.

Cathie Wood, CEO of Ark Invest, is known for her aggressive investment style. Ark Innovation ETF is heavily invested in growth stocks, including Tesla, Tempus AI, and CRISPR Therapeutics. Roughly half of the fund's assets are invested in just 10 companies.

Among the fund's top holdings is Space Exploration Technologies (NASDAQ: SPCX). The space stock accounts for around 4.5% of the fund's invested assets.

Immediately after its IPO, SpaceX stock soared well above $200. After a sharp correction, however, shares now trade below their initial IPO price of $135 per share.

Wood capitalized on the correction by purchasing more SpaceX stock. According to reports, she purchased $21.3 million in SpaceX stock across multiple funds as the price fell.

What do other Wall Street analysts think of Wood's purchases? As expected, there is a wide range of opinions. But the consensus opinion strongly supports Wood's actions.

Wall Street thinks SpaceX stock has 111.5% in potential upside

SpaceX wasn't shy about projecting its growth potential in its IPO prospectus. "We believe we have identified the largest actionable total addressable market in human history," the company claimed in that document. In all, SpaceX believes its total growth opportunity totals $28.5 trillion.

Compared to SpaceX's current $1.5 trillion market cap, the company's project growth opportunities make shares look like a steal. And apparently, most of Wall Street agrees.

Nearly 30 analysts currently cover the stock, with an average 12-month price target of $243.81 -- roughly 111% above the current stock price. Note, however, that analysts have a wide range of expected outcomes. One analyst has an astounding $800 price target. Another thinks shares are actually a "sell," with a price target of just $115.

If most of Wall Street's estimates prove true, Wood is very wise to load up on more SpaceX shares as their value dips. But why exactly is Wall Street so bullish?

Image source: Getty Images.

More than 90% of SpaceX's claimed total addressable market focuses on a single opportunity: AI. Unsurprisingly, Wall Street projects massive growth from SpaceX's AI division.

Morgan Stanley, for example, believes SpaceX's revenue will jump from $18.7 billion in 2025 to $319 billion by 2030. By 2040, the bank expects companywide revenues to reach $3.3 trillion. Morgan Stanley believes nearly all of this sales growth will be driven by success in its AI division.

Morgan Stanley recently reiterated its $300 price target for SpaceX stock. But investors must understand the context.

First, Morgan Stanley was one of the underwriters for SpaceX's IPO. It's not hard to see why a bank looking to sell one of the biggest IPOs in history is very bullish on the stock. SpaceX remains unprofitable, meaning it will likely raise more capital in the future. Morgan Stanley undoubtedly wants to remain in the mix to handle more of SpaceX's financing needs.

Second, even Morgan Stanley analysts admit that there is a wide range of potential outcomes. While $300 remains its average price target, they bet that SpaceX shares could ultimately settle anywhere between $75 and $600 over the next 12 months.

In short, Wall Street likely applauds Wood's ongoing purchases of SpaceX stock. But there remains significant uncertainty about whether SpaceX will ultimately be a wise investment in the year to come.

Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tempus AI and Tesla. The Motley Fool recommends CRISPR Therapeutics. The Motley Fool has a disclosure policy.