Cathie Wood, founder and chief of Ark Investment Management, is best known for backing cutting-edge tech like AI and robotics, with most of her investments focused on U.S. companies.
But this week, she made a move in China, picking up $2.7 million worth of a Chinese tech stock as trade tensions between Washington and Beijing showed signs of easing.
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In early April, President Donald Trump raised tariffs on Chinese goods to as high as 145%, setting off tensions between the world’s two biggest economies and triggering a sharp market sell-off.
Last week, the two sides reached a deal in Geneva: the U.S. will cut those tariffs to 30% for the next three months, while China agreed to lower its own duties on U.S. imports to 10% from 125%.
Wood’s funds saw a brief bump after Trump won the presidency last November, but that momentum didn’t go far. Her flagship Ark Innovation ETF (ARKK) underperformed both the S&P 500 and Nasdaq Composite through March and April amid broader market volatility.
However, as of May 16, ARKK has started to recover, showing a 1.32% gain for the year, slightly ahead of the S&P 500’s 1.30% gain and outperforming the Nasdaq’s 0.52% loss.
Wood gained a remarkable 153% in 2020, which helped build her reputation and attract loyal investors. Still, her long-term performance has made many others skeptical of her aggressive style.
As of May 16, Ark Innovation ETF, with $5 billion under management, has delivered a five-year annualized return of just 0.59%. In comparison, the S&P 500 has an annualized return of 17.57% over the same period.
Image source: Fallon/AFP via Getty Images
Cathie Wood’s investment strategy explained
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 says 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 on April 30, 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.”
“If the current tariff turmoil results in freer trade, as tariffs and non-tariff barriers come down in tandem with declines in other taxes, regulations, and interest rates, then real GDP growth and productivity should surprise on the high side of expectations at some point during the second half of this year,” she wrote.
She also struck an optimistic tone for tech stocks.
“During the current turbulent transition in the U.S., we think consumers and businesses are likely to accelerate the shift to technologically enabled innovation platforms including artificial intelligence, robotics, energy storage, blockchain technology, and multiomics sequencing,” she said.
Not all investors share Wood’s optimism. The Ark Innovation ETF has seen a net outflow of $2.01 billion over the past 12 months through May 14, with $208.41 million exiting in the past month, according to ETF research firm VettaFi.
Cathie Wood buys $2.7 million of Baidu stock
On May 12, Wood’s Ark Autonomous Technology & Robotics ETF (ARKQ) bought 30,217 shares of Baidu Inc (BIDU) . That chunk of stock is valued at roughly $2.7 million.
Primarily known as China’s top search engine, Baidu has shifted its focus to artificial intelligence and autonomous mobility. The company recently launched its new AI model, Ernie X1 and Ernie 4.5, positioning itself as a rival to OpenAI and DeepSeek.
This isn’t Wood’s first move on Baidu or on Chinese tech in general. In the early 2020s, she was bullish on major Chinese tech names, building sizable positions in Baidu, Tencent, and JD.com.
Related: Veteran fund manager unveils bold Nvidia stock price target after rally
By early 2021, The Ark funds held nearly 5 million shares of Baidu, worth around $1 billion, reflecting her optimism on China’s market momentum and Baidu’s push into electric vehicles, a play that echoed her long-standing position in Tesla (TSLA) .
However, Wood’s China investment hit hard in 2021 as Beijing’s regulatory crackdown on tech firms intensified, and she gradually reduced her stakes. By the third quarter of 2022, Ark had fully exited Baidu.
Wood returned to the name on March 24 this year, buying 129,451 shares — her first Baidu purchase in over two years. She added another 136,773 shares in April, followed by this latest May buy. Baidu shares are up roughly 6% in the past month.
In a March interview with Bloomberg, Wood talked about how Robin Li, Baidu’s CEO, is working to grow the company’s self-driving business.
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“We had a conversation very recently with Robin Li and his team and we understand how competitive the market is in China for both autonomous mobility and large language models. But we are looking at how Robin Li is pushing the envelope. Wuhan is the toughest in China. He can take learnings from that robotaxi experience into other markets,” Wood said.
“We believe that autonomous mobility in the next 5 to 10 years is going to scale globally to an $8 to $10 trillion market. If Baidu were to get any of that market even outside of China in the rest of Asia, we think that’s not at all discounted in the stock,” she added.
Baidu stock is up 6.29% year-to-date.
Related: Veteran fund manager unveils eye-popping S&P 500 forecast
