A merger between SpaceX and xAI has all eyes on companies led by Elon Musk with reports that the billionaire could also be eyeing a tie-up with Tesla Inc (NASDAQ:TSLA).
One of the biggest Tesla bulls could be betting on the electric vehicle company combining with the other Musk-led companies.
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Cathie Wood Adds Tesla Stock to Space ETF
The Ark Space & Defense Innovation ETF (BATS:ARKX) added 35,766 Tesla shares to its fund on Wednesday.
Cathie Wood’s Ark Invest is no stranger to buying and selling shares of Tesla stock across several of the fund's ETFs.
However, this purchase should jump out to investors as the fund held no Tesla shares prior to this purchase.
As of Thursday, the Ark Space & Defense Innovation ETF owned 35,766 Tesla shares, representing 1.99% of the fund's assets.
Primarily focused on space and defense stocks, the addition of Tesla should spark some thought for investors. Ark Invest could be building a stake in case Tesla votes on a merger with SpaceX/xAI. The ETF could also be building a Tesla stake due to the fund now listing adaptive robotics as one of its themes.
Tesla's focus on the Optimus Bot and the potential to help use robots to build out planet civilizations could be a reason for Ark to add the company, best known for electric vehicles, to the space ETF.
Ark Invest's Bets on Tesla, SpaceX
Several Ark Invest ETFs hold significant stakes in Tesla stock, the largest holding of Cathie Wood's ETF portfolio. Here are the current holdings:
- Ark Innovation ETF (BATS:ARKK): top holding, 10.99% of assets
- Ark Next Generation Internet ETF (BATS:ARKW): top holding, 10.39% of assets
- Ark Autonomous Technology & Robotics ETF (BATS:ARKQ): top holding, 9.93% of assets
The Ark Venture Fund, which invests in private and public companies, also holds stakes in several Musk-related companies, including the following stakes:
- #1 SpaceX: 11.23% of assets
- #2: xAI: 6.31% of assets
- #30: Tesla: 1.05% of assets
The holdings were as of Jan. 31 and are before the merger of SpaceX and xAI.
What's Next for SpaceX
The big question on everyone's mind is what happens to SpaceX after the large merger with xAI. Plans for a potential June IPO could align with Musk's birthdays and several planetary alignments.
Musk has seemed to confirm plans for an IPO of SpaceX, but nothing has been officially filed.
A combination of SpaceX/xAI with Tesla would require shareholder approval from Tesla shareholders and also approval from regulators.
Investor Chamath Palihapitiya has said he believes Musk will complete a reverse merger to fold SpaceX into Tesla, calling it his "contrarian take for 2026."
Wedbush analyst Dan Ives recently said there is a "growing chance" Tesla could try to combine with the newly created SpaceX/xAI combined company.
"The view is this growing AI ecosystem will focus on Space and Earth together… and Musk will look to combine forces," Ives said.
SpaceX is one of the largest private companies in the world, and right now investors have limited ways to invest in the company. Public companies Bank of America (NYSE:BAC), Alphabet Inc (NASDAQ:GOOG)(NASDAQ:GOOGL) and EchoStar Corp (NASDAQ:SATS) own stakes in SpaceX and could offer investors exposure and potential upside ahead of an IPO.
Ark's investment in Tesla for its space ETF could be simply about robots, but there's also a chance that Wood believes and/or is supportive of the company trying to merge with SpaceX in the future.
Photo: Cathie Wood, courtesy Ark Invest; Tesla, courtesy Shutterstock
