Tesla shares fell 3.27% as Ark Invest cut $30 million stake in three ETFs.

Tesla shares fell 3.2724% in pre-market trading on December 30, 2025, as investors reacted to strategic shifts in fund allocations and sector reallocations.

The decline followed a $30 million reduction in Tesla’s stake by Cathie Wood’s Ark Invest across three ETFs, trimming holdings by 60,715 shares. The move reflects a broader pivot toward gene-editing companies like CRISPR Therapeutics and autonomous mobility firms such as WeRide. Ark Invest simultaneously increased exposure to Pacific Biosciences and AeroVironment, signaling a deliberate shift away from traditional tech and EV plays.

Analysts highlighted heightened short-term volatility for Tesla, as the firm’s P/E ratio of 317 faces pressure amid skepticism about near-term profitability in the EV sector. JPMorgan and Goldman Sachs have lowered price targets due to production challenges and rising competition from traditional automakers. Investors are now closely monitoring Tesla’s upcoming earnings report for clarity on margin resilience and production progress.

With market dynamics shifting, investors are also recalibrating their risk appetites. Short-term options activity has increased, particularly in at-the-money put options as a hedge against further declines. Additionally, institutional investors are showing increased interest in sector rotation strategies that prioritize AI and biotech themes over legacy tech and EV stocks.