ARK Favors Technology and Industrial Sectors While Tesla Faces Worldwide Regulatory Challenges

ARK Innovation ETF Adjusts Portfolio: Reduces Tesla Holdings, Increases Investments in Coinbase and Deere

In late November 2025, Cathie Wood’s ARK Innovation ETF made a notable change to its investment strategy by selling $11.4 million in Tesla shares. At the same time, the fund increased its positions in both Coinbase and Deere, signaling a shift in focus toward technology and industrial sectors as market conditions evolve.

The ETF’s sale of 27,102 Tesla shares continues a trend of reducing exposure to the electric vehicle manufacturer, which has recently faced a series of regulatory and operational challenges. Tesla’s stock performance has been negatively impacted by ongoing legal disputes in India over trademark issues and heightened regulatory scrutiny in Europe regarding its Full Self-Driving (FSD) technology.

In November 2025, the Delhi High Court extended a temporary order preventing Tesla Power India from using the “Tesla” name or marketing electric vehicles until the legal matter is resolved. Meanwhile, European authorities have postponed approval of Tesla’s FSD system, with the Dutch RDW agency emphasizing that safety standards—not public or industry pressure—will dictate the approval timeline. Read more. These uncertainties have led investors like ARK to reconsider their level of investment in Tesla.

Despite Tesla’s ongoing role as a leader in electric vehicles and artificial intelligence, ARK’s recent moves highlight a preference for sectors with strong innovation and growth potential. The ETF’s increased investment in Coinbase reflects confidence in the expanding cryptocurrency sector, while its commitment to Deere aligns with the company’s advancements in industrial automation and precision agriculture—areas expected to drive long-term productivity gains.

In addition to reducing its Tesla stake, ARK acquired $15.8 million in Coinbase shares and $15.2 million in Deere shares. Coinbase’s recent strategic alliances and growing institutional adoption have likely enhanced its attractiveness. Deere’s strong performance, including a recent earnings beat and robust results in construction and forestry, further supports ARK’s investment decision—even as the broader agricultural sector faces headwinds.

Deere reported $12.39 billion in revenue for its fiscal fourth quarter, with construction and forestry sales climbing 27% year-over-year. However, the company remains cautious in its full-year outlook due to ongoing tariff issues and inventory management challenges.

According to market experts, institutional investors are increasingly favoring companies with transparent regulatory environments and scalable business models. Tesla’s ongoing legal and regulatory issues, combined with inconsistent messaging from management regarding FSD development, may have influenced ARK’s decision to reduce its holdings. By increasing investments in Coinbase and Deere, ARK demonstrates a preference for companies with clear growth prospects and fewer regulatory uncertainties.