Cathie Wood, chief of Ark Investment Management, is known for buying “disruptive” tech stocks during market pullbacks.
That’s what she just did, adding one of her highest-conviction investments, Tesla, as the stock fell more than 7% in a day.
In 2025, the flagship Ark Innovation ETF gained 35.49%, far outpacing the S&P 500’s return of 17.88% in the same period. So far this year, Wood’s flagship Ark Innovation ETF (ARKK) is up 4.34% year to date, while the S&P 500 surged 9.32% as of July 2, Yahoo Finance data shows.
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 July 2, her Ark Innovation ETF has delivered a five-year annualized return of -8.56%, while the S&P 500 has an annualized return of 11.45% over the same period, according to data from Morningstar.
Cathie Wood flags “the deflationary impact” of tech innovation
Wood focuses on high-tech companies across artificial intelligence, blockchain, biomedical technology, and robotics. She thinks these businesses have strong growth potential, though their volatility often causes fluctuations in the Ark’s funds.
According to Morningstar analyst Bella Albrecht, two of Wood’s Ark funds were among the worst-performing ETFs in the first quarter of 2026. The Ark Next Generation Internet ETF (ARKW) ranked second on the list, while the ARK Innovation ETF placed fifth.
From 2014 to 2024, the Ark Innovation ETF wiped out $7 billion in investor wealth, according to a March 2025 analysis by Morningstar’s analyst Amy Arnott. That made it the third-biggest wealth destroyer among mutual funds and ETFs in Arnott’s ranking. The analyst hasn’t updated her ranking.
Wood believes investors have been focusing on the wrong signals as they assess the outlook for inflation, interest rates, and stocks.
In a June 5 post on X, Wood said the bond market is increasingly reflecting the deflationary impact of technological innovation, particularly artificial intelligence, rather than the inflation risks many investors still fear.
Wood pointed to the continued flattening of the Treasury yield curve despite a sharp rise in oil prices over the past year. In previous cycles, she noted, an energy shock of that magnitude would have pushed long-term yields higher.
Wood believes the bond market is “discounting something much more powerful: the deflationary impact of technological innovation, particularly artificial intelligence, which is beginning to increase productivity across broad swaths of the economy. ”
She also said easing tensions with Iran and a decline in oil prices could push inflation even lower.
“The next phase of this cycle could be characterized by accelerating growth, declining inflation, falling interest rates, and a strengthening U.S. dollar,” Wood said. “That combination would create a remarkably supportive backdrop for innovation-led equities and the technologies driving the next productivity boom.”
Not all investors agree with Wood’s optimism. Over the past 12 months through July 2, the Ark Innovation ETF saw roughly $1.3 billion in net outflows, according to data from ETF research firm VettaFi.
Cathie Wood buys $38.1 million of Tesla stock
On July 2, Wood’s Ark funds bought 96,935 shares of Tesla Inc. (TSLA), according to Ark’s daily trade information. These shares are valued at approximately $38.1 million based on July 2’s closing price of $393.45.
Tesla shares sank 7.49% on that day of purchase, even after the electric vehicle maker posted a strong Q2 delivery report that reversed its consecutive annual sales declines.
Tesla delivered 480,126 vehicles in Q2, up from about 384,000 a year earlier and 358,023 in the first quarter of 2026. Analysts had expected about 406,600 deliveries in Q2, according to CNBC.
Related: Cathie Wood buys $11.5 million of battered tech stock
July 2’s drop was Tesla stock’s worst day in almost a year, extending a streak of declines following each of the past three quarterly delivery reports. The company is still working to recover from consecutive annual sales declines, which have been partly attributed to backlash against CEO Elon Musk‘s political activities and the loss of a U.S. federal EV tax credit.
In April, Tesla reported mixed first-quarter results. Adjusted earnings came in at 41 cents per share, ahead of Wall Street expectations of 37 cents. But its revenue of $22.39 billion missed analysts’ estimates of $22.64 billion. The company is set to report its Q2 earnings on July 22.
Tesla has been one of the weakest performers among the Magnificent Seven this year, with its shares down 12.51% year to date. Only Microsoft stock performed worse, falling 19.26% over the same period.
But Wood has long been bullish on Tesla stock, and her recent buy is probably just another attempt to buy the dip.
Wood predicted last year that Tesla’s stock would reach $2,600 by 2030, which would value the company at over $9 trillion. This forecast is largely based on her assumption that Tesla’s robotaxi fleet will account for 90% of its total value.
“90% of that valuation comes not from the electric vehicle, but from this robotaxi platform,” Wood said in an interview with Steven Bartlett on his podcast “The Diary Of A CEO.”
Wood said in a June 8 X post that she tried Tesla’s robotaxi fleet in Austin. “Smooth ride, no driver. It’s remarkable to see 10+ years of real-world AI training manifesting in a fully autonomous service,” Wood wrote.
Tesla is the No.1 holding in the Ark Innovation ETF.
Top 10 holdings of the Ark Innovation ETF as of July 2, 2026:
- Tesla Inc. (TSLA) – 10.18%
- Tempus AI Inc. (TEM) – 5.86%
- CRISPR Therapeutics AG (CRSP) – 4.90%
- Robinhood Markets Inc. (HOOD) – 4.84%
- Advanced Micro Devices Inc. (AMD) – 4.58%
- Shopify Inc. (SHOP) – 4.40%
- Space Exploration Technologies Corp. (SPCX) – 4.08%
- Coinbase Global Inc. (COIN) – 3.83%
- Twist Bioscience Corp. (TWST) – 3.71%
- Roblox Corp. (RBLX) – 3.47%
Other than buying Tesla shares, Wood’s latest trades included adding shares of Bullish (BLSH), SoFi Technologies (SOFI), X-Energy (XE), Recursion Pharmaceuticals (RXRX), Generate Biomedicines (GENB), and Alamar Biosciences (ALMR).
She also trimmed holdings in Alibaba (BABA), Roku (ROKU), Twist Bioscience (TWST), Illumina (ILMN), Absci (ABSI), and Strata Critical Medical (SRTA).
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