Cathie Wood, chief executive of Ark Investment Management, typically focuses on technology stocks that she believes to have a disruptive impact.
Sometimes, she’ll buy even if a stock has shown little growth for a while — and that’s what she did last week.
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Investors and analysts have mixed opinions about Wood. Supporters see her as a visionary in tech investing, while critics say she’s a mediocre fund manager.
Wood's followers nicknamed her “Mama Cathie,” driven by her transparent, accessible discussions of strategy in the media. She gained widespread attention with an impressive 153% return in 2020.
However, her longer-term performance isn’t so rosy.
Related: Cathie Wood buys $38 million of surging tech stock
The flagship ARK Innovation ETF (ARKK) , with $5.4 billion under management, has returned 13.56% year-to-date, with an annualized three-year return of -15.4% and a five-year return of 4.63%.
In comparison, the S&P 500 is up 28.4% this year through Dec. 2, with a three-year annualized return of 11.44% and a five-year return of 16.03%.
Cathie Wood’s investment strategy explained
Wood’s investment strategy is simple: ARK ETFs typically buy shares in emerging, high-tech companies across fields like artificial intelligence, blockchain, DNA sequencing, energy storage, and robotics.
Wood says companies in these areas will revolutionize industries, though the stocks are notoriously volatile, leading to substantial swings in the ARK funds’ values.
Investment research firm Morningstar has expressed sharp criticism of Wood and ARK Innovation ETF.
Related: Cathie Wood's net worth: The Ark Invest CEO's wealth & income
"Investing in young companies with slim earnings 'demands forecasting talent, which ARK Investment Management lacks,'" wrote Morningstar analyst Robby Greengold, who described the ETF’s performance as ranging from “tremendous to horrendous.”
Wood defended herself in a July posting on Ark’s website. She acknowledged that “the macro environment and some stock picks have challenged our recent performance,” while affirming her “commitment to investing in disruptive innovation.”
Wood recently expressed optimism about a shift to looser regulation under Donald Trump’s presidency, particularly for technology, cryptocurrencies, and digital assets.
“In the last four years, we saw massive concentration toward very few stocks,” Wood said on CNN’s Inside Politics Sunday on Dec. 1. “I think the market’s going to broaden out right now and reward companies who are at the leading edge of innovation.”
However, some investors echo Morningstar's concerns. The ARK Innovation ETF saw a net outflow of $2.82 billion over the past year, according to data from ETF research firm VettaFi.
Cathie Wood bought 155,637 shares of AMD last week
From Nov. 25 to 27, ARK Funds bought 155,637 shares of Advanced Micro Devices (AMD) in total.
That chunk of stock was valued at roughly $22.11 million as of Dec. 2’s close.
On Oct. 30, Ark Funds purchased 111,080 AMD shares right after the chipmaker's shares tumbled following its earnings results.
AMD’s third-quarter earnings on Oct. 29 met expectations with adjusted earnings per share of 92 cents. Revenue beat forecasts at $6.82 billion, compared with the estimated $6.71 billion.
Related: AMD's biggest problem is a massive opportunity
On Oct. 30, however, AMD shares fell more than 10% due to weak fourth-quarter revenue guidance, moderating investor enthusiasm.
The company projects Q4 revenue at $7.5 billion, below the $7.54 billion market estimate.
AMD still expects solid demand ahead as hyperscalers like Amazon (AMZN) ramp up their artificial-intelligence spending. The hyperscalers are the major providers of cloud infrastructure and services.
“Looking forward, we see significant growth opportunities across our data center, client and embedded businesses driven by the insatiable demand for more compute,” AMD Chief Executive Lisa Su said in a statement.
AMD is now Nvidia's (NVDA) most important rival in the AI chip industry, but it lags NVDA both market performance and the broader tech investment narrative.
Fund manager buys and sells:
- Cathie Wood sells $5 million of 2 surging tech stocks
- Cathie Wood buys $38 million of surging tech stock
- Cathie Wood sells $48 million of battered tech stock
AMD's data center segment reported a record $3.5 billion in revenue for the third quarter of 2024 — more than doubling (up 122%) year over year increase.
Nvidia reported data-center revenue of $30.8 billion, also more than doubling year-over-year.
AMD closed at $142.06 on Dec. 2 and is down 3.63% year-to-date. It was trading above $211 in March. Nvidia and the Nasdaq Composite are up 180% and 29.3% this year, respectively.
AMD is not in Ark Innovation ETF's top 10 holdings as of Dec. 2.
Related: Veteran fund manager sees world of pain coming for stocks
