Among Musk’s companies, both SpaceX and Tesla have benefited from billions of dollars in subsidies and grants, and SpaceX president and COO Gwynne Shotwell said last year the company had $22 billion in federal contracts, the bulk of which came from NASA.

This reliance on the government could become a problem not just for Musk’s companies, but for investors amid his spat with Trump, said Wood in a video uploaded to ARK Invest’s YouTube channel Friday.

“I think the way this is evolving is Elon, Tesla, and investors are beginning to understand more and more just how much the government has control here,” Wood said in the video. “Elon is involved in companies that are depending on the government.”

For Neuralink, a more hostile regulatory environment could also be a problem. While Musk’s brain-implant company has already received FDA approval for human trials, any future commercialization would also require federal approval. Meanwhile, Tesla could later need to deal with federal regulations for its autonomous-taxi plan, added Wood. Any regulation on AI imposed by the executive branch could also affect xAI, Musk’s AI company, which also owns X, his social network. 

Last week, Tesla’s stock plummeted by as much as 14% before rebounding, as Musk criticized Trump’s “big beautiful bill,” and Trump shot back threatening to terminate Musk’s government contracts. Finally, Musk came back and said SpaceX would decommission its Dragon spacecrafts, one of which brought home two NASA astronauts in March after an unexpected nine-month stay on the International Space Station.

Later, though, Musk took back his statement on the Dragon spacecraft, and has since appeared to have deleted at least one of his most inflammatory posts on X attacking Trump.

Wood said Musk is starting to walk back the feud with Trump, adding he “certainly doesn’t want to be impaired,” as the U.S. negotiates with China, on which Tesla depends both for the production and sale of its products. China recently granted licenses for rare-earth minerals to suppliers of the Big Three U.S. automakers, Reuters reported. Tesla was not included, said Wood.

“Clearly there has been some brand damage to Tesla, which he readily admits, and I think he’s trying to disengage from the government and being associated with one party or another,” she said.

Still, Wood said she believes the pair will ultimately work out their issues.

“One of the things I’ve observed over the years, since we’ve held Tesla, is that Elon Musk works really well under pressure, and he creates a lot of that chaos and pressure himself.”