Cathie Wood buys $12 million of tumbling AI stock

Cathie Wood, head of Ark Investment Management, targets tech companies she believes will lead the next wave of innovation.

But she’s not a passive investor. She frequently adjusts her positions, buying more when stock prices fall and trimming when they rally, balancing short-term gains and her long-term vision.

That’s what she just did, buying shares of a popular tech stock that has tumbled 36% after earnings.

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, Wood’s biggest position — slid amid growing concerns over the macroeconomy and trade policies.

Now, the Ark funds are making a strong comeback. As of Aug. 15, the flagship Ark Innovation ETF (ARKK) is up 33.7% year-to-date, far outpacing the S&P 500’s 9.7% 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%.

Those swings have weighed on her long-term results. As of Aug. 15, the Ark Innovation ETF has delivered a five-year annualized return of negative 1.4%, while the S&P 500 has an annualized return of 15.6% over the same period.

Over the past five days through Aug. 14, the Ark Innovation ETF attracted $5.52 billion in net inflows, according to data from ETF research firm VettaFi.

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.

She says these companies have the potential to reshape industries, but their volatility leads to major fluctuations in Ark funds' values.

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Over the 10 years ending in 2024, the Ark Innovation ETF wiped out $7 billion in investor wealth, 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.

Still, Wood has been bullish on the market. In a letter to investors published in late April, she dismissed predictions of a recession dragging into 2026 and 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.

Many investors share this optimism. Over the past five days through Aug. 14, the Ark Innovation ETF attracted $5.52 billion in net inflows, according to data from ETF research firm VettaFi. That’s almost 70% of the fund’s $8 billion assets at the end of July.

Cathie Wood buys $12 million of CoreWeave stock

On Aug. 15, Wood’s Ark Next Generation Internet ETF (ARKW) bought 120,229 shares of CoreWeave Inc. (CRWV) worth roughly $12 million.

The purchase came after CoreWeave tumbled 20.8% on Aug. 13 and another 15.5% on Aug. 14, following earnings that showed a larger-than-expected loss as the company increased spending to meet surging demand.

CoreWeave is a cloud infrastructure company specializing in GPU-accelerated computing for artificial intelligence and machine learning workloads. The company is backed by Nvidia (NVDA) , now the AI chipmaker’s largest holding.

On Aug. 12, CoreWeave posted a second-quarter loss of 60 cents per share, much wider than Wall Street analysts' forecast of a loss of 45 cents. Still, revenue jumped 207% from a year earlier to $1.21 billion, topping estimates.

Operating expenses in Q2 nearly quadrupled, rising 276% to $1.19 billion. “We are scaling rapidly as we look to meet the unprecedented demand for AI,” said Michael Intrator, co-founder and CEO of CoreWeave.

CFO Nitin Agrawal said during the earnings call that the company is “still operating in a structurally supply-constrained environment, where demand far outstrips supply for our products and services.”

In Q2, CoreWeave’s operating margin fell to 2% from 20% a year ago. Agrawal cautioned that the company will “incur some costs prior to revenue generation,” which will have a short-term impact on margins.

For the current quarter, the company expects revenue between $1.26 billion and $1.30 billion, slightly above the $1.25 billion analysts had forecast.

Despite the recent drop, CoreWeave stock is still up 156% since its March debut.

While Wood is buying, Morgan Stanley, JPMorgan Chase, and Goldman Sachs are arranging sales of up to $10 billion of CoreWeave stock as the IPO lock-up ends.