Cathie Wood is cutting exposure to two high-profile growth trades while adding to a defence stock that Wall Street increasingly thinks has fallen too far.
ARK Invest sold 29,048 SpaceX shares worth about $4.7 million on Thursday and 22,500 AMD shares valued at nearly $14 million. The firm bought 159,918 shares of Kratos Defense & Security Solutions for roughly $6.7 million.
The trades are not necessarily a dollar-for-dollar rotation. But their direction is notable, as ARK is trimming two richly valued growth names while repeatedly adding to a defence-technology stock that has lost about 45% this year.
Wood is trimming winners while building a contrarian defence bet
AMD remains up roughly 190% in 2026 despite Thursday’s nearly 4% decline, while SpaceX is an important ARK holding.
Both companies remain backed by strong growth narratives, from artificial-intelligence chips to satellite broadband and launch services.
Kratos presents a different setup. Its shares closed Thursday at $41.93 after a punishing year as investors worried about capital spending, cash consumption and how quickly investments in unmanned aircraft and hypersonic systems would produce returns.
ARK’s buying looks more persistent than opportunistic. The firm purchased more than 309,000 Kratos shares across Tuesday and Wednesday before adding another 159,918 on Thursday.
That does not prove Wood is abandoning AI or space, but suggests ARK sees a more asymmetric opportunity in a company where expectations have already been cut sharply.
Kratos fell 45%, but Wall Street’s forecasts moved the other way
The stock-price collapse sits awkwardly beside improving operating momentum.
Kratos reported second-quarter revenue of $458.8 million, up 30.5% from a year earlier, while organic growth reached 19.1%.
Management raised its full-year organic revenue growth forecast to between 18% and 23%, even as heavy investment continues to pressure near-term cash generation.
Wall Street has become increasingly bullish into that weakness.
Barclays analyst Anthony Valentini initiated Kratos at Overweight with a $90 price target, according to Yahoo Finance, arguing that the US is in the “early innings of a modern-day industrial revolution”.
The bank prefers faster-growing defence-technology companies over many traditional large-cap contractors.
TipRanks puts Kratos’ average 12-month target at $95, implying roughly 126% upside from Thursday’s close. Its current consensus consists of 16 Buy ratings and one Hold.
The gap is striking, as the market is pricing execution risk aggressively, while analysts are still underwriting rapid growth.
Bigger wager is on how defence budgets are changing
The bullish case rests on more than a rebound in valuation. Kratos is exposed to areas where Pentagon priorities are shifting quickly, including low-cost autonomous aircraft, hypersonics, rocket systems, propulsion and space.
These markets fit a broader move towards systems that can be produced at scale alongside expensive traditional weapons.
Rothschild & Co Redburn analyst Maggie Schooley initiated Kratos with a Buy rating and $70 target this week. Barron’s quoted her saying that “military spending is increasing globally as forces adapt to changes in modern warfare”.
Guggenheim analyst Michael Ciarmoli has also started coverage with a Buy rating and $74 target.
The firm sees Kratos as well positioned for Pentagon spending on unmanned systems, affordable munitions, space and hypersonics, while partnerships with larger defence groups could help it gain market share.
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