Cathie Wood's 2 Biggest Positions Are Both Elon Musk Companies. Together They Are 16% of the Fund.
Key Points
Tesla and SpaceX together account for about 16% of ARK Innovation's assets, according to ARK's own daily holdings file.
Tesla fell 5.92% on Friday after its invite-only Cybercab launch event disappointed investors and safety regulators opened an audit query into the robotaxi.
Tesla alone accounted for most of the fund's decline on Friday.
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Shares of Tesla (NASDAQ:TSLA) fell 5.92% on Friday, after the company's invite-only Cybercab launch event left investors underwhelmed and federal safety regulators opened an audit query into the new robotaxi. Cathie Wood's ARK Innovation ETF (NYSEMKT:ARKK) slipped 1.06% the same day.
Those two moves are more connected than they look. Not only is Tesla the fund's biggest position, but the second-biggest position, SpaceX (NASDAQ:SPCX), answers to the same CEO. SpaceX fell 1.2% on Friday, too.
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Together, the two Elon Musk companies make up about 16% of a fund with 47 holdings.
Image source: Getty Images.
Two stocks, one CEO
ARK publishes the fund's holdings daily, and the file dated Friday, Sept. 4, shows how top-heavy the ARK Innovation ETF is. Tesla sits at 9.62% of assets, and SpaceX sits at 6.28% -- about 16% combined. Stablecoin issuer Circle Internet Group is the No. 3 position at 6.06%, just behind SpaceX. And the top 10 positions account for about half of the fund's $6.6 billion in assets.
Of course, the fund is concentrated at the top generally, not just in Musk's companies. The Musk pairing is different, though. Two positions run by the same person can move on the same news, and owning both doesn't spread the risk the way owning two unrelated companies would.
Zoom out, and the concentration hasn't been an obvious edge lately, either. The fund gained about 15% over the past year, a stretch in which the S&P 500 (SNPINDEX:^GSPC) rose about 19%.
How much of Friday came from Tesla?
Thursday was supposed to be a milestone for Tesla. The company put its two-seat Cybercab robotaxi into service in Austin, Texas.
But the launch event was invite-only, wasn't streamed, and CEO Elon Musk didn't appear. The event also gave no details on pricing, production pace, or deployment plans.
Regulators moved the same day, too. The National Highway Traffic Safety Administration opened an audit query into Tesla's self-certification of the Cybercab (a vehicle with no steering wheel or pedals) as compliant with federal safety standards.
Tesla's stock had climbed 5.4% on Thursday ahead of the event. By Friday's close, it was down 5.92% to about $354, leaving it about 29% below its 52-week high.
For ARK Innovation, the effect was mostly a matter of weight. A position that makes up 9.62% of assets and falls 5.92% takes about 0.6 of a percentage point off the fund by itself. The fund fell 1.06% on Friday. In other words, more than half of the day's decline came from one stock.
And that stock isn't cheap. Tesla trades at about 155 times the earnings it's expected to produce next year, a price that I'd argue assumes products like the Cybercab ramp quickly and smoothly.
SpaceX is even more expensive
The fund's other Musk position has been a public company for less than three months. SpaceX, the satellite internet and rocket company, went public on June 12 at $135 per share in the largest initial public offering on record.
To be fair, the business is growing impressively. Second-quarter revenue came in at $7.8 billion, up 92% year over year from $4.1 billion. The connectivity segment, built around Starlink's satellite internet service, produced $4.3 billion of that, more than the company's other two segments combined. And the growth is accelerating: revenue rose about 15% year over year in the first quarter before the second quarter's surge.
The company isn't close to profitable, though. SpaceX lost $541 million in the second quarter, an improvement from a $1 billion loss a year earlier. But over the first six months of 2026, its net loss widened to $4.8 billion from $1.5 billion.
Shares trade around $148 as of this writing, modestly above their offering price. That puts SpaceX's market value near $2 trillion -- about 64 times sales, measuring a full year of revenue at the second quarter's pace.
Ultimately, a fund with 47 holdings sounds diversified, and in most respects this one is. At the very top, it isn't. About 16% of the fund rides on one CEO's two companies, and both are arguably among the most expensive stocks in the market.
For investors who own ARK Innovation as a spread-out bet on innovation, the pairing at the top may deserve more attention than the fund's 47 holdings suggest.
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Daniel Sparks has clients with positions in Tesla. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.
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