Cathie Wood's company bought SpaceX shares on the day the stock fell 16%. Should you do the same?

Funds managed by tech investor Cathie Wood purchased shares in Elon Musk’s space company SpaceX on June 22—just as the stock price plummeted by 16%, Barron’s noted. According to the daily trading report, four ARK Invest exchange-traded funds (ETFs) purchased SpaceX shares on Monday: a total of about 210,000 shares. At Monday’s closing price, this block was worth about $32 million, Barron’s calculated. As of June 23, ARK funds collectively held approximately $520 million worth of SpaceX shares.

SpaceX lost $401 billion in market capitalization on Monday, with its stock falling for the third consecutive day. During Tuesday’s trading session, the stock initially continued to fall, dropping to $147.6—below its opening price on the first day of trading after the IPO—but then stabilized: at the time of publication, it was up about 3.4%.

On Monday, SpaceX announced plans to issue its first investment-grade dollar-denominated bonds. The company will use the proceeds to repay a $20 billion bridge loan it secured earlier in 2026 following its acquisition of xAI, Reuters reported.

Susquehanna analyst Chuck Minervino, who began covering SpaceX shares on Tuesday with a neutral rating, advises investors to “wait for a better entry point,” according to Barron’s. Susquehanna’s price target of $170 implies a 10% increase from the June 22 closing price.

“We believe that the current valuation requires high multiples based on very aggressive assumptions about revenue and operating profit growth. Since some of the markets in which SpaceX operates have not yet proven their sustainability, we believe the range of possible outcomes is very wide,” Minervino wrote in a note cited by Barron’s.

Analysts do not expect SpaceX to turn a profit before 2028. At the close of trading on June 22, however, its shares were trading at a P/S ratio—which reflects the ratio of the company’s market capitalization to its annual revenue—of 56, according to Barron’s. In other words, investors valued the company at approximately $56 for every $1 of expected revenue this year.

Wall Street fears that the AI boom may soon slow down: hyperscalers will likely find it increasingly difficult to continue spending on AI at the current pace, the publication notes. The market is also concerned that the Federal Reserve may raise interest rates several times in 2026: this typically puts more pressure on growth stocks, such as SpaceX, since higher borrowing costs reduce the present value of future cash flows, the publication explains.

Five out of nine analysts tracking shares of Elon Musk’s space company recommend buying them, according to MarketWatch, while two rate the stock as neutral and two others recommend selling. Wall Street expects SpaceX shares to rise by nearly 57% from the closing price on June 22: the analysts’ consensus price is $242.6.

This article was AI-translated and verified by a human editor