Cathie Wood, head of Ark Investment Management, often buys stocks when they dip and sells after strong runs.
She recently unloaded about $40 million of one of Ark’s top holdings as investors grow more wary of a possible tech bubble.
Wood gained a reputation after the Ark Innovation ETF delivered a 153% return in 2020. Year to date, the flagship Ark Innovation ETF (ARKK) is up 39.54% as of Dec. 12, far outpacing the S&P 500’s gain of 16.08% in the same period.
Wood’s style brings sweet wins in rising markets but also painful losses in bearish ones, as seen in 2022, when the Ark Innovation ETF tumbled more than 60%.
Those swings have weighed on her long-term results. As of Dec. 12, the Ark Innovation ETF has delivered a five-year annualized return of -7.83%, while the S&P 500 has an annualized return of 14.94% over the same period, according to data from Morningstar.
In the 12 months through Dec. 10, the Ark Innovation ETF saw roughly $1.19 billion in net outflows.
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Cathie Wood rejects “AI bubble”
Wood’s strategy is straightforward: Her Ark ETFs focus on emerging high-tech companies in areas such as artificial intelligence, blockchain, biomedical technology, and robotics.
Wood sees these businesses as potential forces for big change and long-term growth, though their volatility often creates fluctuations in the value of Ark’s funds.
Related: Cathie Wood’s net worth: The Ark Invest CEO’s wealth & income
From 2014 to 2024, the Ark Innovation ETF wiped out $7 billion in investor wealth, according to an analysis by Morningstar analyst Amy Arnott. That made it the third-biggest wealth destroyer among mutual funds and ETFs in Arnott’s ranking.
In October, Wood said in a CNBC interview that she expects to see a market “shudder” as interest rates begin to rise.
Still, Wood believes in the potential of AI, denying the “AI bubble” talk amid concerns about the high valuations of tech stocks.
“I do not believe AI is in a bubble,” Wood said. “ What I do think is, on the enterprise side, it is going to take a while for large corporations to prepare themselves to transform…in order to really capitalize on the productivity gains that we think are going to be unleashed by AI.”
Not all investors agree with Wood. In the 12 months through Dec. 10, the Ark Innovation ETF saw roughly $1.19 billion in net outflows, according to ETF research firm VettaFi.
Cathie Wood sells $40 million of Tesla stock
On Dec. 12, Wood’s Ark funds sold 87,993 shares of Tesla Inc. (TSLA), valued at about $40.4 million, marking one of her largest recent disposals. The move followed earlier sales totaling 47,456 Tesla shares on Dec. 4, 5, and 8.
Wood increased her Tesla position in Q3 2025, adding about 512,000 shares. The move came after four consecutive quarters of selling, during which she offloaded 2.2 million Tesla shares from Q3 2024 to Q2 2025, according to Stockcircle’s data.
Tesla is still the largest holding of the Ark Innovation ETF, accounting for nearly 12%.
Top 10 holdings of the Ark Innovation ETF as of Dec. 12, 2025:
- Tesla (TSLA) 11.92%
- CRISPR Therapeutics (CRSP) 5.54%
- Roku (ROKU) 5.49%
- Coinbase Global (COIN) 5.42%
- Shopify (SHOP) 5.07%
- Tempus AI (TEM) 5.04%
- Robinhood Markets (HOOD) 4.38%
- Palantir Technologies (PLTR) 3.77%
- Roblox (RBLX) 3.70%
- Advanced Micro Devices (AMD) 3.39%
Wood predicted Tesla’s stock would reach $2,600 in five years, which is more than five times its current trading price.
“Ninety percent of that valuation comes not from the electric vehicle, but from this Robotaxi platform,” Wood explained during a June interview with Steven Bartlett on his podcast “The Diary Of A CEO.”
Related: Cathie Wood sells $15.8 million of megacap tech stock
“The $2,600 number does not include much for humanoid robots… this is happening faster than we thought,” Wood added. “Humanoid robots are the convergence of the three technologies or innovation platforms: robots, energy storage, and AI. So Tesla is way ahead of the game on humanoid robots.”
But investors are increasingly focused on whether Tesla can still drive revenue from its core electric vehicle business, despite lofty ambitions around Robotaxis and humanoid robots.
In November, Tesla’s U.S. sales fell to a nearly four-year low, dropping 23% to 39,800 vehicles, Reuters reported on Dec. 11, citing Cox Automotive data.
EV sales have weakened broadly since late September, after the Trump administration ended the $7,500 federal tax credit. But Tesla’s rivals have been hit as well, and the slowdown actually lifted Tesla’s U.S. market share to 56.7% from 43.1%, according to the data.
“Tesla has a serious challenge on its hands next year when several other automakers are planning to roll out cheaper vehicles that are also full of fun features,” said Stephanie Valdez Streaty, Cox’s director of industry insights.
Tesla stock is up more than 40% over the past six months. Year to date, the stock gained 13.65%, underperforming the S&P 500 index, which gained more than 16% over the same period.
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