Silin Chen
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Cathie Wood buys $31.8 million of surging AI stock originally appeared on TheStreet.
Cathie Wood, chief of Ark Investment Management, often aggressively invests in high-flying tech stocks she sees as future game-changers.
She buys even as stock prices surge, betting that long-term disruption will overcome short-term volatility. This is just what she did recently, adding shares of a popular AI stock that has surged more than 8% in the past five days.
Wood’s funds have experienced a volatile ride this year, swinging from sharp losses to strong gains.
In January and February, the Ark funds rallied as investors bet on the Trump administration's potential deregulation that could benefit Wood’s tech bets. But the momentum faded in March and April, with the funds trailing the market as top holdings — especially Tesla, her biggest position — slid amid growing concerns over the macroeconomy and trade policies.
Related: Popular AI stock inks 5G network deal
Now, the fund is regaining momentum. As of June 20, the flagship Ark Innovation ETF (ARKK) is up 17.6% year-to-date, far outpacing the S&P 500’s 1.5% gain.
Wood's remarkable return of 153% in 2020 helped build her reputation and attract loyal investors. Her strategy can lead to sharp gains during bull markets but also painful losses, like in 2022, when ARKK dropped more than 60%.
As of June 20, Ark Innovation ETF, with $5.5 billion under management, has delivered a five-year annualized return of 0.4%. The S&P 500 had an annualized return of 15.8% over the same period.
Over the past 12 months through June 18, the Ark Innovation ETF saw $2.4 billion in net outflows, with $256 million exiting the fund in just the past five days, according to ETF research firm VettaFi.</em>Image source: Fallon/AFP via Getty Images" height="540" loading="eager" src="data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///ywAAAAAAQABAAACAUwAOw==" width="960">
Wood’s investment strategy is straightforward: Her Ark ETFs typically buy shares in emerging high-tech companies in fields such as artificial intelligence, blockchain, biomedical technology, and robotics.
Wood says these companies have the potential to reshape industries, but their volatility leads to major fluctuations in Ark funds' values.
Related: Cathie Wood's net worth: The Ark Invest CEO's wealth & income
The Ark Innovation ETF wiped out $7 billion in investor wealth over the 10 years ending in 2024, according to an analysis by Morningstar’s analyst Amy Arnott. That made it the third-biggest wealth destroyer among mutual funds and ETFs in Arnott’s ranking.
Wood recently said the U.S. is coming out of a three-year “rolling recession” and heading into a productivity-led recovery that could trigger a broader bull market.
In a letter to investors published in late April, she dismissed predictions of a recession dragging into 2026, as she expects "more clarity on tariffs, taxes, regulations, and interest rates over the next three to six months."
