ARK's Cathie Wood Doubles Down on Tesla Amid Market Sell-Off, Buys 160,000 Shares

Barron's reported on Friday (24th) that Tesla (TSLA-US) had a brutal week in terms of stock performance, but for Cathie Wood, the well-known U.S. investor behind ARK Invest, it presented a buying opportunity.

On Thursday, ARK purchased approximately 160,000 shares of Tesla stock through four of its funds: ARK Innovation ETF, ARK Space & Defense Innovation ETF, ARK Next Generation Internet ETF, and ARK Autonomous Technology & Robotics ETF.

This purchase came immediately after Tesla released its disappointing second-quarter earnings on Wednesday night, causing the stock to plummet nearly 15% on Thursday.

By Friday, Tesla had still not recovered, closing down another 2.1% at $313.03.

Tesla's Q2 operating profit was around $400 million, approximately $1.3 billion below Wall Street's expectations.

Markets had expected Tesla's operating profit to exceed last year's $923 million, especially given that Q2 electric vehicle deliveries reached about 480,000 units, a 25% year-over-year increase. However, weaker pricing, higher costs, and other factors dragged down overall performance.

Wood's decision to buy while others sell is not surprising. ARK has long been a staunch supporter of Elon Musk. Tesla is currently the largest holding in the ARK Innovation ETF, accounting for nearly 10% of its assets. SpaceX ranks as the third-largest holding in the same ETF, behind Tempus AI. Both SpaceX and Tempus AI each represent nearly 5% of the fund's assets.

SpaceX is also the top holding in the ARK Space & Defense Innovation ETF, making up nearly 8% of its assets.

As of Friday, Tesla's stock is down 30% year-to-date and has declined 2.5% over the past 12 months. Recent market movements suggest that investors are becoming slightly uneasy about the pace of AI expansion and sky-high valuations.

Tesla launched its AI-trained Robotaxi service in Austin, Texas in June 2025 and has since expanded to several cities, but growth remains slow.

Meanwhile, Tesla's stock is currently trading at over 150 times its expected earnings for the next 12 months. In contrast, the average forward P/E ratio of the other 'Magnificent Seven' tech giants is close to 24 times.

Despite these concerns, ARK remains committed to its investment thesis.