Cathie Wood, chief of Ark Investment Management, often locks in gains when her favorite tech stocks surge. That's what she's doing with Palantir Technologies (PLTR), trimming her position after the stock jumped more than 30% over the past month, fueled by a sharp post-earnings rally. Last year, the flagship Ark Innovation ETF gained 35.49%, far outpacing the S&P 500's return of 17.88% in the same period.
But so far this year, Wood's flagship Ark Innovation ETF (ARKK) is up 4.15% as of Aug. 14, while the S&P 500 surged 13.74%, Yahoo Finance data show. Wood gained a reputation after the Ark Innovation ETF delivered a 153% return in 2020. But her style also brings painful losses in bearish markets, as seen in 2022, when the Ark Innovation ETF tumbled more than 60%.
Those swings have weighed on Wood's long-term gains. As of Aug. 14, her Ark Innovation ETF has delivered a five-year annualized return of -7.40%, while the S&P 500 had an annualized return of 11.75% over the same period, according to data from Morningstar. Wood usually focuses on high-tech companies across artificial intelligence, blockchain, biomedical technology, and robotics.
She believes these businesses have strong growth potential, though their volatility often causes fluctuations in the Ark's funds. Over the decade ended 2025, the Ark Innovation ETF wiped out nearly $5 billion in investor wealth, according to an analysis by Morningstar's analyst Amy Arnott. That made it the fourth-biggest wealth destroyer among mutual funds and ETFs in the ranking.
Wood remains optimistic about AI, which she sees as a major driver of productivity, economic growth, and corporate profits in the years ahead. In a recent post on X (the former Twitter), Wood said U.S. corporate profits remain unusually strong, with domestic profits before tax at 13.2% of GDP, a level she said is near multi-decade highs. Related: Cathie Wood buys $16.2 million of popular semiconductor stock Some of that strength came from the massive monetary and fiscal stimulus during the pandemic, but Wood believes another factor is helping sustain margins today: Companies are leaning into AI and productivity gains to protect them.
"I think we're still early in seeing how far that can go," she said, adding that companies that use AI effectively will "separate themselves from the ones that don't." Wood also found reasons for optimism in the latest U.S. jobs report, despite nonfarm payrolls falling by 23,000. "It's not as scary as it looks," she said, pointing to higher prime age labor force participation, cooling wages and productivity growth approaching 3%. She also suggested AI may be helping accelerate baby boomer retirements.
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