Cathie Wood buys $10.7 million of sinking AI stock

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Cathie Wood, head of Ark Investment Management, targets “disruptive” tech companies and actively manages her positions.

She often adds shares when prices fall and trims positions when they rise. Recently, she made a notable purchase of an AI stock during a pullback.

Wood gained a reputation after the Ark Innovation ETF delivered a 153% return in 2020. Last year, the flagship Ark Innovation ETF (ARKK) gained 35.49%, far outpacing the S&P 500’s return of 17.88% in the same period.

Wood’s style brings sweet wins in rising markets but also painful losses in bearish ones, as seen in 2022, when the Ark Innovation ETF tumbled more than 60%.

Those swings have weighed on Wood’s long-term results. As of Jan. 21, the Ark Innovation ETF has delivered a five-year annualized return of -10.98%, while the S&P 500 has an annualized return of 13.94% over the same period, according to data from Morningstar.

In the 12 months through Jan. 21, the Ark Innovation ETF saw roughly $1.18 billion in net outflows.Getty Images · Getty Images

Wood focuses on emerging high-tech companies across artificial intelligence, blockchain, biomedical technology, and robotics. She views these businesses as potential forces for big changes and long-term growth, though their volatility often brings fluctuations to the Ark’s funds.

From 2014 to 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.

In a 2026 outlook letter published on Jan. 15, Wood says the U.S. economy is storing up energy for a sharp rebound.

“Despite sustained real gross domestic product growth during the past three years, the underlying US economy has suffered a rolling recession and has evolved into a coiled spring that could bounce back powerfully during the next few years,” Wood wrote.

Wood once again rejects the “AI bubble” talk, saying it “is years away” and “the most powerful capital spending cycle in history” is coming.

“What once was the cap in spending seems to have become a floor now that the AI, robotics, energy storage, blockchain technology, and multiomics sequencing platforms are ready for prime time,” she said.

Not all investors agree with Wood’s optimism. In the 12 months through Jan. 21, the Ark Innovation ETF saw roughly $1.18 billion in net outflows, according to ETF research firm VettaFi.

On Jan. 20, Wood’s Ark Innovation ETF bought 32,408 shares of Broadcom Inc. (AVGO), valued at about $10.7 million, following her earlier buy of 31,573 shares on Jan. 8 and 143,089 shares on Jan. 14.

Broadcom is a key AI chip supplier that designs custom processors for hyperscalers like Google, Meta, and OpenAI.

Its shares have tumbled roughly 20% since its fiscal Q4 earnings release on Dec. 11, 2025, even though the results beat Wall Street consensus.

Broadcom reported adjusted earnings of $1.95 per share, beating analysts’ estimates of $1.86, while revenue came in at $18.02 billion, topping expectations of $17.49 billion.

Broadcom management expects its AI revenue to continue to boom.

“We see the momentum continuing in Q1 and expect AI semiconductor revenue to double year-over-year to $8.2 billion, driven by custom AI accelerators and Ethernet AI switches,” Broadcom CEO Hock Tan said in a statement.

In the semiconductor sector, Wood has also recently increased positions in Advanced Micro Devices (AMD) and Taiwan Semiconductor Manufacturing Co (TSM).

Tesla (TSLA) 10.16%
CRISPR Therapeutics (CRSP) 5.44%
Roku (ROKU) 5.16%
Coinbase Global (COIN) 4.90%
Tempus AI (TEM) 4.88%
Shopify (SHOP) 4.18%
Robinhood Markets (HOOD) 3.97%
Advanced Micro Devices (AMD) 3.91%
Beam Therapeutics (BEAM) 3.71%
Palantir Technologies (PLTR) 3.40%

Citi analyst Atif Malik expects a strong semiconductor earnings season forward, with Wall Street likely to raise expectations across most of the sector, according to a Jan. 20 research note sent to TheStreet.

The firm’s top stock picks are Broadcom, Nvidia (NVDA), Analog Devices (ADI), and NXP Semiconductors (NXPI).

“Fundamentally, compute and networking demand for next-gen reasoning models is accelerating and will likely drive upside for both Broadcom and Nvidia, which we see as core AI holdings,” Malik wrote, adding that the recent pullback provides a good entry point for investors.

This story was originally published by TheStreet on Jan 23, 2026, where it first appeared in the Investing section. Add TheStreet as a Preferred Source by clicking here.