Cathie Wood, the founder and CEO of Ark Investment Management, continues to make bold moves in the tech sector despite mixed performance and criticism. On Monday, she acquired 14,686 shares of Alphabet Inc. (GOOGL), valued at $2.4 million, taking advantage of the stock's 14% decline from its July peak. This purchase aligns with Wood's strategy of buying on dips, particularly in tech companies she believes will be long-term winners.Alphabet's recent slide is largely attributed to investor concerns over its heavy investments in artificial intelligence (AI), which have yet to deliver substantial revenue or profit gains. In the second quarter, Alphabet's capital expenditures, including AI, rose to $13.2 billion—exceeding analyst expectations. Despite these concerns, Alphabet reported strong financial results, with a 14% increase in revenue and a 29% surge in profit.
Wood’s Ark Innovation ETF, known for its focus on disruptive technologies, has faced significant challenges.
The ETF posted negative annualized returns of 8% over the past year, 30% over three years, and 1% over five years, underperforming the S&P 500. The fund has also seen a net outflow of $2.3 billion in the last 12 months, with its assets declining by 13% in just the past 18 days.
Wood remains confident in her approach, which targets high-tech sectors like AI, blockchain, DNA sequencing, energy storage, and robotics. However, critics, including Morningstar, argue that her strategy carries high risks, especially given the volatility and unproven potential of the young companies she invests in.
Despite the controversies, Wood continues to attract attention as one of the most prominent investors in the tech space, though opinions on her effectiveness remain sharply divided.