Cathie Wood, CEO of Ark Investment Management, is known for actively trading tech stocks she believes will shake up industries.
This week, she stuck to her strategy of buying stocks when their prices drop.
Investors and analysts have mixed opinions on Cathie Wood. Supporters see her as a visionary in tech investing, but critics say sheâs only a mediocre fund manager.
Wood’s followers affectionately dubbed her âMama Cathieâ after she drew widespread attention with a remarkable 153% return in 2020.
However, her longer-term performance isnât so hot:
The flagship ARK Innovation ETFÂ (ARKK) , with $6.7 billion under management, returned 12.65% for the past 12 months, with an annualized three-year return of -15.59% and a five-year return of 2.92%.
In comparison, the S&P 500 gained 25.45% in the past year, with a three-year annualized return of 8.86% and a five-year return of 14.28%.
Wood recently shared optimism about a move toward fewer regulations under Donald Trump’s presidency.
Cathie Woodâs investment strategy explained
Cathie Woodâs investment strategy is straightforward: Her ARK ETFs typically buy shares in emerging, high-tech companies in fields such as artificial intelligence, blockchain, DNA sequencing, energy storage, and robotics.
Wood says these companies will transform industries, but their volatility causes significant swings in ARK funds’ values.
Related: Cathie Wood sells $21.5 million of soaring tech stocks
Investment research firm Morningstar has sharply criticized Wood and Ark Innovation ETF.
Amy Arnott, Morningstar portfolio strategist, calculated that Ark Innovation wiped $7.1 billion of shareholder wealth from its 2014 inception 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 shared optimism about a move toward fewer regulations under Donald Trump’s presidency, especially in areas like technology, cryptocurrencies and digital assets.
âIn the last four years, we saw massive concentration toward very few stocks,â Wood said on CNNâs Inside Politics Sunday in December 2024. âI think the marketâs going to broaden out right now and reward companies who are at the leading edge of innovation.â
Not all investors are persuaded by Wood’s confidence. Over the past year, Ark Innovation ETF saw a net outflow of $3.2 billion, with $219 million exiting the fund in the past week, according to ETF research firm VettaFi.
Cathie Wood bought AMD this week
On Dec. 31, Woodâs Ark funds bought 82,456 shares of Advanced Micro Devices (AMD) .
That chunk of shares was valued at roughly $9.94 million as of Jan. 2âs close.
In October 2024 AMD posted third-quarter earnings that matched analysts’ estimates, with revenue coming in slightly ahead of expectations.Â
Its fourth-quarter revenue outlook fell short of Wall Street’s forecasts. The company projected sales of $7.5 billion, compared with the anticipated $7.55 billion.
Related: Analysts reveal top AI stocks for 2025, including Nvidia and Palantir
AI still dominates the AMD story, but the company’s AI market share remained significantly lower than that of its competitor, Nvidia, which dominated the AI GPU market.
AMD also faces challenges in meeting the growing demand for its AI processors, with CEO Lisa Su indicating that chip supplies would be tight going into the next year.
“And going into the next few quarters going into 2025, I think we expect that the environment will continue to be tight, but we’ve also planned for significant growth going into 2025. And so we feel good about our overall supply chain capability,” Su said in the company’s Q3 earnings call.
“The concern from here is that AMD won’t be able to provide upside to [Wall Street] estimates that are already $8 billion-$9 billion for calendar 2025,” Jefferies analysts said, according to Reuters.
Shares of AMD dropped about 10% over the past year as the company faces challenges meeting investors’ high hopes. This follows a sharp rally in 2023 when the shares doubled due to excitement around AI-related growth.
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In November 2024, AMD announced a reduction in its global workforce of 1,000, or 4%, of its employees.
AMD is not in Ark Innovation’s (ARKK)  top 10 holdings as of Jan. 2.
Related: Veteran fund manager delivers alarming S&P 500 forecast
