Cathie Wood, head of Ark Investment Management, is known for actively trading tech stocks she believes will shake up industries.
She frequently adjusts her positions, selling stocks when the prices rise.
That’s what she has been doing with a well-known tech stock 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 followers affectionately dubbed her “Mama Cathie” after she drew widespread attention with a remarkable 153% return in 2020.
However, her longer-term performance isn’t so rosy:
The flagship ARK Innovation ETFÂ (ARKK) , with $6.7 billion under management, returned 19.09% for the past 12 months, with an annualized three-year return of -11.28% and a five-year return of 2.91%.
In comparison, the S&P 500 gained 25.96% in the past year, with a three-year annualized return of 9.85% and a five-year return of 14.51%.
Over the past year, Ark Innovation ETF saw a net outflow of $3.1 billion.
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.
Investment research firm Morningstar sharply criticized Cathie Wood and the ARK Innovation ETF.
Related: Cathie Wood’s net worth: The Ark Invest CEO’s wealth & income
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 expressed optimism about a move toward fewer regulations under Donald Trump’s presidency, especially in areas such as 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 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, Ark Innovation ETF saw a net outflow of $3.1 billion, with $154 million exiting the fund in the past week, according to ETF research firm VettaFi.
Cathie Wood sold 221,950 shares of Palantir
From Jan. 3 to Jan. 7 Wood’s ARK Funds sold 221,950 shares of Palantir Technologies (PLTR) .
That chunk of stock was valued at roughly $16.9 million.
Palantir quadrupled (up 340%) in 2024, making it one of the biggest Nasdaq winners of the year. The rally was driven by the company’s expanding role in, and strong demand for, AI-powered data analytics.
Governments widely use Palantir for intelligence and defense, and enterprises use it for data-driven operations. Its products help them spot patterns and discover key insights in large datasets.
Related: Analysts reveal AI stock picks for 2025, including Palantir
Still, investors are increasingly concerned about the stock’s valuation, saying it might be overpriced after the big rise.
Wood has been trimming her Palantir stake over the past month:
On Dec. 6, she sold 95,570 shares valued at $7.3 million.On Dec. 19, she sold 33,402 shares valued at $2.5 million.From Dec. 23 to Dec. 26, she sold 168,510 shares valued at $13.8 million.
Despite these sales, Palantir remains a major position in Wood’s portfolio.
As of Jan. 9, Palantir ranks fifth in Ark Innovation (ARKK) ’s holdings, accounting for 4.92% of the fund with a total market value of $315.3 million.
Palantir stock has lost roughly 10% over the past week. The stock closed at $68.23 on Jan 8.
Veteran trader revamps Palantir stock after Wood’s sale
Is it time to buy the dip in Palantir? Wall Street veteran Stephen “Sarge” Guilfoyle doesn’t think it’s time just yet.
“Palantir Investors, even I, one of the more well known PLTR bulls, have taken token profits at price targets and tried to buy them back lower when granted the opportunity,” Guilfoyle wrote on Jan. 8.
Guilfoyle successfully predicted Palantir’s growth as early as May 2024. He is not overly worried about the long-term perspective on Palantir shares, affirming a price target of $90 for the stock.
“PLTR is still the king of software applied to big-data-focused, AI-infused analysis, and there is no shortage of demand for these services,” Guilfoyle said.
Related: Veteran fund manager delivers alarming S&P 500 forecast
