Cathie Wood, Ark Investment Management’s CEO, primarily targets small—and mid-cap technology stocks, seeking future growth. She also buys mega-cap stocks to add stability to her funds.
That's what she has been doing with a well-known tech heavyweight in recent weeks.
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Investors and analysts have mixed feelings about Cathie Wood. Supporters view her as a visionary in tech investing, while critics say she’s only a mediocre asset manager.
Wood’s loyal fans, who affectionately nicknamed her “Mama Cathie,” were drawn to her after she delivered an extraordinary 153% return in 2020.
But her longer-term performance tells a less attractive story:
Between Jan 10, 2024 and Jan. 10, 2025, the flagship ARK Innovation ETF (ARKK) , with $6.7 billion under management, returned 16.45%, with an annualized three-year return of -12.11% and a five-year return of just 2.54%.
In comparison, the S&P 500 gained 23.51% over the same stretch, with a three-year annualized return of 9.34% and a five-year return of 14.06%.
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Cathie Wood’s investment strategy explained
Cathie Wood’s investment strategy is straightforward: Her ARK ETFs typically buy shares in emerging, high-tech companies in fields such as artificial intelligence, blockchain, biotechnology, and robotics.
Wood believes 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
Amy Arnott, portfolio strategist at Morningstar Research Services, calculated that Ark Innovation wiped $7.1 billion of shareholder wealth from its launch in 2014 through 2023.
That put the ETF as No. 3 on her wealth destruction list for mutual funds and ETFs for the past decade.
Wood recently expressed optimism about a potential move toward fewer regulations under Donald Trump's future presidency, especially in areas such as technology, cryptocurrencies, and digital assets. Trump takes office again on Jan. 20.
“In the last four years, we saw massive concentration toward very few stocks,” Wood told CNN in December 2024. “I think the market’s going to broaden out right now and reward companies who are at the leading edge of innovation.”
However, not all investors are persuaded by Wood's confidence. Over the past year, the ARK Innovation ETF has seen a net outflow of $3.1 billion, with $154 million exiting the fund in just the past week, according to ETF research firm VettaFi.
Cathie Wood buys 39,288 shares of Amazon
On Jan. 6, Wood’s ARK Funds bought 39,288 shares of Amazon.com (AMZN) .
That chunk of stocks was valued at roughly $8.6 million at Jan 10.
This follows her recent Amazon buys, including 15,301 shares on Dec. 31 and 7,499 shares on Dec. 23.
Wedbush Securities said last month that the next big shift in the artificial intelligence boom will focus on software. That is a trend Wood had predicted back in 2023.
“For every dollar of hardware that Nvidia (NVDA) sells, software providers, SaaS providers will generate 8 dollars in revenue,” Wood told Bloomberg in May 2023.
Related: Analysts reveal AI stock picks for 2025, including Palantir
Amazon stock is up roughly 45% over the past year. While the company is mostly known for its e-commerce business, its Amazon Web Services (AWS) platform is a major player in the cloud computing industry, holding a 31% market share.
In terms of profitability, AWS outpaces e-commerce as Amazon's largest segment. In the third quarter, AWS reported $10.7 billion in operating income, compared to $7 billion from the e-commerce business,
Amazon CEO Andy Jassy said during Q3 earnings call that the company will spend more on capex in 2025 “driven by generative AI.”
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Amazon is also building its own AI chips, Trainium, aiming to provide a cheaper alternative for Nvidia’s products. Apple is a customer of the chip.
Amazon is not in Ark Innovation ETF's top 10 holdings as of Jan. 10. Amazon shares closed at $218.94 that day.
Tesla (TSLA) is the ETF's largest holding, representing about 14% of its portfolio as of Jan. 9. Tesla was up 62.5% in 2024.
Related: Veteran fund manager delivers alarming S&P 500 forecast
