Cathie Wood, the founder and chief investment officer of Ark Invest, has never been shy about making bold bets on companies pushing the boundaries of technology. Her latest move is turning heads even by her own standards. Wood recently snapped up $51 million worth of SpaceX shares, the rocket and satellite company founded by Elon Musk, which began trading publicly just last month. The purchase has drawn plenty of attention, largely because SpaceX has seen its stock price crater since its post-IPO peak, losing nearly half its value in a matter of weeks.
SpaceX closed on July 17 at $124 per share, roughly 8 percent below its IPO price of $135 and a striking 45 percent off its high of $225. Despite that steep decline, the company still carries an eye-popping valuation of around $1.6 trillion. That figure raises more than a few eyebrows, especially considering SpaceX has yet to turn a profit. The company does not currently have a price-to-earnings ratio because it has no earnings to speak of. Its price-to-sales ratio sits near 65.5, an extraordinarily rich number when compared with established tech giants like Apple at 11 or Amazon at 3.7, both of which actually generate profits.
So why would one of the most closely watched investors in the country pour tens of millions into such a speculative name? Part of the answer may lie in Wood’s long-standing conviction. Ark Invest had been backing SpaceX well before it ever hit public markets, suggesting this latest buy reflects genuine confidence rather than a sudden case of FOMO. Wood may also be drawn to SpaceX’s dominance in space launches and satellite communications, along with its emerging work in artificial intelligence compute satellites. There is also the simpler possibility that she believes the sell-off has largely run its course.
That optimism is far from universal. Critics point out that SpaceX is priced for perfection, meaning any stumble could trigger another wave of selling. That dynamic already played out recently when the company postponed a Starship test flight due to engine issues, sending shares down more than 5 percent in a single session. With the first quarterly earnings report expected sometime in early August, investors should brace for sharp swings in either direction depending on what those numbers reveal.
For everyday investors weighing whether to follow Wood into SpaceX, caution seems warranted. The stock offers little margin of safety at current levels, and there are plenty of other promising technology stocks that come with actual earnings attached. Those who cannot resist the allure of Musk’s space venture might consider starting small and waiting for either a better entry point or clearer signs that the business can grow into its massive valuation. For now, SpaceX remains a high-stakes gamble, and even one of Wall Street’s boldest investors might need nerves of steel to ride out whatever comes next.