Cathie Wood, head of Ark Investment Management, frequently adjusts her top positions, adding to a holding when the stock falls and selling when it rises.
Last week, she made some notable purchases. This week, she sold a top AI stock as the markets began to recover from tariff-driven losses.
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Wood’s funds saw a short-lived boost after Donald Trump won the presidency last November, but the gains didn’t last. Her flagship fund, the Ark Innovation ETF (ARKK) , is down roughly 11.75% year-to-date as of April 30, underperforming both the S&P 500 and Nasdaq, which are down 5.31% and 9.65%, respectively.
Wood’s remarkable 153% gain in 2020 helped build her reputation and attract loyal investors, but her long-term performance has made others skeptical of her aggressive style.
As of April 29, Ark Innovation ETF, with nearly $5 billion under management, has delivered an annualized three-year return of 3.02% and a five-year return of negative 1.39%.
The S&P 500 index, by contrast, has a three-year annualized return of 12.12% and a five-year return of 15.36%.
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 buys $3 million of Nvidia, AMD stock after tumble
The Ark Innovation ETF wiped out $7 billion in investor wealth over the 10 years ending in 2024, according to a recent 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 raised concerns about Trump’s tariffs and warned that if the tariff plan isn’t handled carefully, it could cause a bear market or recession. However, she’s hopeful that negotiations could ease tensions.
“Trump wants to be one of the greatest presidents ever… he’s not going to get there by throwing the economy into a recession and the stock market into a bear market,” she said.
Not all investors share Wood’s optimism. The Ark Innovation ETF has seen a net outflow of $2.31 billion over the past 12 months through April 29, with $55.44 million exiting in the last week alone, according to ETF research firm VettaFi.
Cathie Wood sells $8.8 million of Palantir stock
On April 28, Wood’s Ark funds sold 53,532 shares of Palantir Technologies Inc. (PLTR) , followed by another sale of 22,380 shares on April 30. The combined sales totaled roughly $8.8 million.
The purchase came as the artificial intelligence software company’s stock jumped 30% over seven straight trading days since April 22.
Palantir is known for providing AI-driven data analytics software to the U.S. government and military, as well as commercial clients. Its stock has gained eightfold over the past five years as investors rush to early adopters in the AI space.
In February, the company posted fourth-quarter results that surpassed Wall Street expectations, with revenue growing 36% year-over-year. It also provided strong guidance for 2025.
Following the last earnings, Palantir stock hit a closing peak of $124.62 on Feb. 18. Then, the stock pulled back, driven by budget cuts at its crucial client, the Pentagon, and a broad market sell-off.
Now, the stock is trading close to $120 again, driven by market corrections and recent defense contracts, including one with NATO.
Related: Analysts reset Palantir stock forecast amid rally
Investor optimism is also building ahead of its upcoming May 5 earnings report, and Wood probably wants to secure some gains before the results.
Investors will be eyeing business progress, updated guidance, and whether management is worried about a potential slowdown in federal defense spending.
Palantir is up 57% year-to-date. Still, the stock’s valuation remains elevated, raising concerns about the sustainability of its performance.
More Palantir
- Analysts reset Palantir stock forecast amid rally
- Venture capital leader has harsh words for Palantir
- Musk may be teaming up with Palantir on important project
The company currently trades at 212.77x forward earnings — well above other software providers like Microsoft (MSFT) at 26.32x and Salesforce (CRM) at 24.04x.
Palantir is the second-biggest holding in Wood’s Ark Innovation ETF, making up 8% of the fund and valued at roughly $421 million.
Related: Veteran fund manager unveils eye-popping S&P 500 forecast
