Cathie Wood sells $10.8 million of popular AI stock

Cathie Wood, chief of Ark Investment Management, frequently adjusts her top positions, adding to a holding when the stock falls and selling when it rises. That strategy has paid off in the recent market boom, with her funds riding the wave of high-growth stocks.

Most recently, Wood has been cashing out of a soaring AI name to lock in gains.

Wood’s funds have experienced a volatile ride this year, swinging from sharp losses to strong gains.

In January and February, the Ark funds rallied as investors bet on the Trump administration's potential deregulation that could benefit Wood’s tech bets. But the momentum faded in March and April, with the funds trailing the market as top holdings slid amid growing concerns over the macroeconomy and trade policies.

Now, the Ark’s funds are showing solid performance again. As of Sept. 16, the flagship Ark Innovation ETF  (ARKK)  is up more than 40% year-to-date, far outpacing the S&P 500’s 12.3% gain.

Wood's remarkable return of 153% in 2020 helped build her reputation and attract loyal investors. Her strategy can lead to sharp gains during bull markets but also painful losses, like in 2022, when ARKK dropped more than 60%.

Those swings have weighed on her long-term results. As of Sept. 15, the Ark Innovation ETF has delivered a five-year annualized return of negative 2.3%, while the S&P 500 has an annualized return of 16% over the same period.

Cathie Wood’s investment strategy explained

Wood’s investment strategy is straightforward: Her Ark ETFs typically buy shares in emerging high-tech companies in fields such as artificial intelligence, blockchain, biomedical technology, and robotics.

She thinks these companies have the potential to reshape industries and bring outsized long-term returns, but their volatility leads to major fluctuations in Ark funds' values.

Related: Cathie Wood's net worth: The Ark Invest CEO's wealth & income

Over the 10 years ending in 2024, the Ark Innovation ETF wiped out $7 billion in investor wealth, according to an analysis by Morningstar’s analyst Amy Arnott. That made it the third-biggest wealth destroyer among mutual funds and ETFs in Arnott’s ranking.

Still, Wood has been bullish on the market. In a letter to investors published in late April, she dismissed predictions of a recession dragging into 2026 and struck an optimistic tone for tech stocks.

"During the current turbulent transition in the U.S., we think consumers and businesses are likely to accelerate the shift to technologically enabled innovation platforms, including artificial intelligence, robotics, energy storage, blockchain technology, and multiomics sequencing," she said.

Some investors share this optimism. In the five days through Sept. 12, the Ark Innovation ETF drew about $3.18 billion in net inflows, according to ETF research firm VettaFi. That equals nearly 44% of the fund’s $7.17 billion in assets as of the end of August.

Cathie Wood sells $10.8 million of Tempus AI stock

From Sept. 9 to 15, Wood’s Ark funds trimmed her stake in Tempus AI  (TEM) , selling shares of the AI medical company for five consecutive trading days.

Wood had actively bought Tempus AI’s stock since last June's IPO. Former Speaker of the House Nancy Pelosi also bets on this stock. In January, Pelosi bought 50 call options (a bet that a stock will rise) for Tempus AI valued at least $50,000. The calls will expire in January 2026.

Related: Jim Cramer drops blunt 3-word message on TikTok buyers

Tempus AI is a health technology company founded in 2015. It uses AI for diagnostics and helps physicians make personalized, data-driven decisions. The stock has surged 158% year-to-date.

On Aug. 8, the company released solid Q2 earnings and outlook, with revenue increasing 89.6% year-over-year to $314.6 million, topping the analyst consensus of $297.8 million. Non-GAAP loss per share narrowed to (22) cents from (63) cents a year ago.

Tempus AI also lifted its full-year 2025 revenue forecast to $1.26 billion and now expects adjusted EBITDA profitability for fiscal 2025.

“We saw significant re-acceleration of our clinical volumes, which grew 30% in the quarter, as we delivered more than 212,000 NGS tests,” said Tempus AI's CEO, Eric Lefkofsky.

Despite the trim, Tempus AI remains one of ARKK’s largest stakes, ranking as the fifth biggest holding at 5.78% and worth nearly $500 million.

Wood says health care is the "most underappreciated application of AI."

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“We’ve got 37 trillion cells in our body, and they’re going to be sequenced as we’re looking for cures,” Wood told CNBC in February.

“I think the most underappreciated application of AI is health care. I think health care is responsible for an incredible amount of storage out there right now. Data is the name of the game,” Wood said.

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