Cathie Wood has expanded ARK Invest’s position in SpaceX with a new $21.3 million purchase even as fresh warnings about a potential AI-driven market bubble have unsettled investor sentiment.
- Cathie Wood’s ARK Invest bought another $21.3 million worth of SpaceX shares despite the stock’s recent decline.
- The purchase comes as a U.S. Treasury draft report warns that an AI downturn could pose risks beyond the technology sector.
- Analysts remain divided, with some warning AI valuations are overheating while BlackRock trims direct AI exposure.
According to data from Yahoo Finance, SpaceX stock continued its recent slide on Monday, July 13, closing at $139.14, down 4.24% for the session. It has since recovered modestly, trading around $140.69 during Tuesday’s session.
According to ARK Invest’s daily trading disclosures, the firm bought 130,241 shares of SpaceX across its ARK Innovation ETF (ARKK), ARK Autonomous Technology & Robotics ETF (ARKQ), and ARK Next Generation Internet ETF (ARKW). The combined purchase was valued at about $21.3 million.
As reported by crypto.news earlier, the latest transaction extends ARK Invest’s buying campaign during SpaceX’s post-listing decline.
Last month, the investment manager acquired about $32.5 million worth of SpaceX shares after the stock fell more than 16% from its post-IPO peak. That followed an investment of roughly $444.3 million across four ETFs on the company’s Nasdaq debut on June 12.
ARK Invest keeps adding despite technical weakness
With the latest decline, SpaceX shares have slipped below the $150 level that previously served as an important price area. Notably, $145 has now become a key resistance level after earlier acting as support.
This continued selling could push the stock below its $135 IPO price if bearish pressure remains. SpaceX shares rebounded after ARK Invest bought about $52 million worth of stock during an earlier buying round last week.
Technical indicators, however, continue to paint a cautious picture. The MACD indicator has turned negative, suggesting bearish momentum is still active and could make it harder for the stock to recover above $150 in the near future.
Treasury report outlines AI-related market risks
While ARK Invest increased its exposure to SpaceX, attention has also turned to a draft report from the U.S. Department of the Treasury examining risks tied to the rapid expansion of artificial intelligence.
Drawing on research by career-focused researchers at the University of Texas at Austin, cited by NOTUS, the report said AI companies are now more deeply connected to the U.S. economy than internet firms were during the dot-com era.
According to the report, any sharp downturn in the AI sector could spread beyond technology stocks into private credit, semiconductor manufacturers, cloud service providers, electric utilities, and businesses financing large-scale data center construction.
The Treasury report did not predict that such a downturn is imminent. Instead, it described a downside scenario in which AI companies fail to deliver the productivity gains and profitability currently expected by investors.
Under those conditions, the report said investment growth could slow, investor confidence could weaken, and economic expansion could lose momentum. It also identified supply chain disruptions, geopolitical tensions, electricity shortages, and financing constraints for data center infrastructure as additional risks.
Meanwhile, market observers continue to debate whether AI valuations have become stretched. In a recent Substack post, Bernstein and Cummings argued that the performance of leading AI stocks indicates the bubble is “still inflating.”
They also wrote that major technology companies are committing so much capital to AI that their cash reserves are shrinking, while technology investment has climbed to nearly 5% of U.S. GDP, exceeding levels seen during the dot-com era.
A different approach has emerged at BlackRock. According to comments from BlackRock analyst Rick Rieder, the asset manager is reducing exposure to companies whose businesses are centered on artificial intelligence and instead increasing focus on firms expected to benefit indirectly from AI demand.
One example he cited was Bitcoin miner TeraWulf, which has signed a 20-year agreement with Anthropic to host one of the company’s data centers.
