Cathie Wood Buys the Dip in Beaten-Down SpaceX Stock. Analysts See 86% Upside Ahead
Cathie Wood Buys the Dip in Beaten-Down SpaceX Stock. Analysts See 86% Upside Ahead.
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SpaceX (SPCX) has quickly gone from Wall Street's hottest IPO to one of its biggest debates. After soaring more than 67% above its $135 IPO price shortly after listing in June, the stock has pulled back sharply and recently slipped below that offering price for the first time.
There, Cathie Wood saw an opportunity and rushed in to buy the dip. ARK Invest founder bought another $16.7 million worth of SPCX shares as the stock traded below its IPO price, adding to more than $50 million of purchases earlier this month.
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ARK Invest, led by the famously bullish tech investor, purchased approximately $16.6 million to $16.7 million worth of SPCX stock on Wednesday, July 15. Four ARK funds participated in the purchase, including the flagship ARK Innovation ETF (ARKK), ARK Next Generation Internet ETF (ARKW), and ARK Space & Defense Innovation ETF (ARKX), buying about 123,000 shares total.
It wasn't an isolated move. Wood has been aggressively accumulating SpaceX shares throughout July. The week ending July 10 alone saw ARK Invest purchase roughly $52.1 million worth of SPCX. On July 13, the firm added another $21.3 million. By July 15, total weekly purchases had surpassed $36 million across multiple funds.
It is pretty clear from these massive transactions that Wood has been an aggressive buyer of SpaceX.
SPCX stock is down roughly 44% below its post-IPO peak and beneath its IPO price right now.
Several factors have weighed on the shares. Investors have become increasingly concerned about the company's aggressive AI spending following its acquisition of xAI, while expectations for continued heavy capital expenditures have pressured sentiment. The market is also looking ahead to an August lockup expiration that could release roughly 20% of outstanding shares for trading, creating potential selling pressure.
Despite the recent weakness, Cathie Wood has continued buying throughout the decline rather than trimming her position.
Even after the recent selloff, SpaceX remains one of the market's most expensive large-cap growth stocks.
The shares currently trade at roughly 95 times trailing sales, well above many leading AI companies. Nvidia (NVDA) trades at around 24 times sales, while several other mega-cap technology companies command substantially lower revenue multiples.
The valuation becomes more reasonable if analysts' growth forecasts prove accurate. Consensus estimates call for approximately 95% revenue growth this year, bringing the forward price-to-sales ratio closer to 34 times.
Although SpaceX remains best known for reusable rockets, the company is rapidly evolving into a much broader technology platform.
The company operates roughly 9,600 Starlink satellites, serving approximately 10.3 million subscribers across 164 countries. Earlier this year, SpaceX also completed its all-stock acquisition of xAI, adding Elon Musk's artificial intelligence business to its portfolio and significantly expanding its AI ambitions.
The company continues investing aggressively across multiple businesses. It recently completed its 13th Starship test flight, deploying 20 next-generation Starlink V3 satellites designed to deliver gigabit internet speeds while gathering additional flight and landing data.
