Cathie Wood, head of Ark Investment Management, has earned a reputation for backing disruptive technology companies.
However, Wood recently reduced one of his highest-conviction investments, Tesla, after the stock fell about 6.23% over the past month and is down more than 9% so far this year.
In 2025, Ark Innovation’s flagship ETF gained 35.49%, far outpacing the S&P 500’s return of 17.88% over the same period. But so far this year, Wood’s flagship Ark Innovation ETF (ARKK) is down 2.85%, while the S&P 500 is up 8.56%, Yahoo Finance data shows.
Wood built a reputation after the Ark Innovation ETF returned 153% in 2020. However, his style also brings painful losses in bear markets, as seen in 2022, when the Ark Innovation ETF fell more than 60%.
Those changes have weighed on Wood’s long-term earnings. As of June 12, the Ark Innovation ETF has returned a five-year annualized return of -8.06%while the S&P 500 has an annualized return of 11.84% during the same period, according to Morningstar data.
Cathie Wood expects rate cut
Wood focuses on high-tech companies in artificial intelligence, blockchain, biomedical technology and robotics. She believes these businesses have great growth potential, although 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) was second on the list, while the ARK Innovation ETF was fifth.
Over the past 12 months ending June 11, the ARK Innovation ETF recorded approximately $294.27 million in net outflows.Getty Images
From 2014 to 2024, the Ark Innovation ETF wiped out $7 billion in investor wealth, according to a March 2025 analysis by Morningstar analyst Amy Arnott. That made it the third biggest wealth destroyer among mutual funds and ETFs in Arnott’s ranking. The analyst has not updated her ranking.
Wood said on the June 5 episode of “In the Know” that he is closely watching June 17, when Kevin Warsh, the new chairman of the Federal Reserve, announces the next interest rate decision.
“I think Kevin Warsh knows that interest rates have to go down, at least mortgage rates. And if inflation goes down as productivity goes up, no matter how strong the economy is, I think he will cut rates,” Wood said.
Related: Cathie Wood Buys $4.3 Million in Falling Tech Stocks
Wood argued that productivity improvements brought about by technology are helping to boost the economy while reducing inflation. He added that oil prices already appear to be peaking and could fall further if the war with Iran is resolved.
Wood also pointed to early signs that some companies are cutting prices.
“We’re hearing other companies like Walmart and Costco say they’re not passing on price increases as much as you might expect because they’re seeing efficiency and productivity gains thanks in large part to artificial intelligence and robotics,” Wood added.
In a Bloomberg podcast from March, Wood says the global economy is not headed for a recession, but rather for what she calls a “great acceleration” driven by artificial intelligence and other innovative technologies.
“We are not going into the Great Depression, but into a great acceleration,” Wood said. “These technologies are deflationary…AI training costs are falling 75% per year, and inference costs are falling 85% and even 98% annually.”
Not all investors agree with Wood’s optimism. Over the past 12 months through June 11, the ARK Innovation ETF recorded approximately $294.27 million in net outflows, according to data from ETF research firm VettaFi.
Cathie Wood sells $16.2 million worth of Tesla stock
On June 12, Wood’s ARK Next Generation Internet ETF (ARKW) sold 39,850 shares of Tesla (TSLA). Based on the last closing price of $406.43, these shares were worth around $16.2 million.
On June 12, Tesla shares gained 1.83% after Elon Musk’s SpaceX opened its doors for trading. SpaceX shares rose 19% on their first day of trading, helping to push Musk’s net worth above $1 trillion and making him the world’s first billionaire. Musk also serves as CEO of Tesla.
Related: Cathie Wood May Have Timed Her Elon Musk Bet Correctly
Tesla reported mixed first-quarter results in April. Adjusted earnings were 41 cents per share, above Wall Street expectations of 37 cents. However, revenue of $22.39 billion missed analyst estimates of $22.64 billion as the company’s core electric vehicle business remained under pressure, CNBC reported.
The electric vehicle maker delivered 358,023 vehicles during the first quarter, fewer than the previous quarter but about 6% more than a year earlier. Tesla has posted annual declines over the past two years, with a drop in the prior-year quarter partially attributable to production disruptions related to Model Y factory upgrades.
Musk has increasingly focused investor attention on Tesla’s self-driving ambitions and humanoid robot projects. The company is currently testing a limited robotaxi service in Texas, although vehicle sales still account for the vast majority of Tesla’s revenue.
Piper Sandler analyst Alexander Potter said in a recent research note that many investors remain skeptical about Tesla’s fully self-driving technology, often citing Waymo’s larger robotaxi operation as a reason to question Robotaxi, according to a recent research note.
Despite skepticism, Potter believes Tesla has indeed achieved Level 4 autonomy. He noted the expansion of the company’s robotaxi services, the development of Cybercab, insurance offerings and efforts to build robotaxi infrastructure.
Furthermore, the analyst claims that in April his Tesla took him from Missoula to Minneapolis, thus reinforcing his conviction. Piper has an Overweight rating on the stock with a $500 price target.
Tesla shares are down 9.63% so far this year, ranking fifth among the Magnificent Seven group. The stock trails Alphabet (+14.91%), Nvidia (+10.02%), Apple (+7.09%) and Amazon (+3.35%), but has outperformed Meta (-14.11%) and Microsoft (-19.21%).
Wood predicted last year that Tesla shares would reach $2,600 in 2030, valuing the company at more than $9 trillion. This forecast is largely based on the assumption that Tesla’s robotaxi fleet will account for 90% of its total value.
“90% of that valuation is not coming from the electric vehicle, but from this robotaxi platform,” Wood said last year in an interview with Steven Bartlett on his podcast “The Diary Of A CEO.”
Wood said in a June 8 post that he recently experienced Tesla’s robotaxi fleet in Austin. “Seamless, driverless travel. It’s remarkable to see 10+ years of real-world AI training manifesting into a fully autonomous service,” Wood wrote, adding that his Robotaxi received a $75 parking ticket, which he described as “a new line of operating expenses for our Tesla model.”
The recent selling is probably just a profit-taking measure. Tesla remains the top holding in both the Ark Innovation ETF and the Ark Next Generation Internet ETF.
Ark Innovation ETF’s Top 10 Holdings as of June 12, 2026:
Tesla Inc. (TSLA) 10.48%
Tempus AI Inc. (TEM) 5.24%
Robinhood Markets Inc. (HOOD) 5.02%
Advanced Microdevices Inc. (AMD) 4.95%
CRISPR Therapeutics AG (CRSP) 4.92%
Shopify Inc. (STORE) 4.53%
Roku Inc. (ROKU) 4.11%
Coinbase Global Inc. (COIN) 3.80%
Circle Internet Group Inc. (CRCL) 3.78%
Twist Bioscience Corp. (TWST) 3.18%
Wood’s trading activity over the past week has focused primarily on trimming positions. In addition to selling Tesla, he also sold shares of Advanced Micro Devices (AMD), Rocket Lab (RKLB), Roku (ROKU), and Chinese technology company Baidu (BIDU). Its main purchase was the newly listed Space Exploration Technologies (SPCX), or SpaceX.
Related: Goldman Sachs doubles down on its 2026 stock market outlook
This story was originally published by TheStreet on June 13, 2026, where it first appeared in the Investments section. Add TheStreet as a preferred source by clicking here.
