Cathie Wood sells $22 million of surging stocks

Cathie Wood, chief of Ark Investment Management, often goes after tech companies she views as leaders in cutting-edge innovation.

But her focus isn’t limited to technology. She also invests in other sectors, targeting business models and industries she believes offer strong growth potential.

This week, however, she unloaded a large stake in one of those bets that has been surging.

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 Aug. 30, the flagship Ark Innovation ETF  (ARKK)  is up more than 30% year-to-date, far outpacing the S&P 500’s 9.8% 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 Aug. 30, the Ark Innovation ETF has delivered a five-year annualized return of negative 4.2%, while the S&P 500 has an annualized return of 14.7% 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 says 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.

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.

Not all investors share this optimism. Over the past 12 months through Aug. 28, the Ark Innovation ETF saw $1.5 billion in net outflows, according to data from ETF research firm VettaFi.

Cathie Wood sells $22 million of DraftKings stock

Over the past week, Wood has been trimming her stake in DraftKings Inc.  (DKNG) . For four straight trading days from Aug. 26 to 29, her Ark funds sold 462,521 shares of DraftKings.

Those shares are worth about $22 million, making it one of her biggest recent sales. Wood sold another 376,440 shares of DraftKings in early August.

The massive selling marked Wood’s first DraftKings transactions in months. Her last sale was back in March.

DraftKings is one of the largest sports betting providers in the U.S. The stock has already climbed more than 10% in the past month and is up nearly 29% year-to-date.

With football season approaching, several analysts expect the stock to surge. On Aug. 11, Argus raised its price target on DraftKings to $55 from $45 and kept a buy rating, The Fly reported.

The firm expects revenue to grow, driven by new states legalizing online sports betting. It also sees benefits from market-share gains, stronger customer retention, and declining acquisition costs, which “bode well for the company’s long-term growth.”

Wood’s sale may simply be locking in gains, but it could also mean a change in view. She has long been bullish on DraftKings, pointing to its near duopoly in sports betting.

That thesis may be challenged by a recent move from Robinhood Markets  (HOOD) .

In August, Robinhood announced the launch of prediction markets for NFL and NCAA football games in the Power 4 conferences (ACC, Big Ten, Big 12, SEC). It’s a move Wood may see as “disruptive,” the usual reason she invests in a stock.

Ark Invest’s Director of Research Nick Grous said in an email that Robinhood’s new markets could “reshape the way investors and consumers think about and respond to the convergence between sports and financial markets.”

He added Robinhood offers lower fees and broader access, with a business model that requires less regulation.

“Robinhood’s prediction markets function more like tradable financial contracts than sports bets. That means users no longer need to navigate a patchwork of state gambling laws. In contrast, DraftKings operates in 25 states plus Washington, D.C., each requiring regulatory approval,” Grous wrote.

Robinhood is a top-10 holding in the Ark Innovation ETF, ranking ninth, and Wood has largely boosted her stake in the company over the past month.

DraftKings now accounts for 1.35% of the ETF, making it the fund’s 22nd largest position.