Cathie Wood, chief of Ark Investment Management, is an active trader during earnings season.
That’s exactly what she’s doing with Tesla, buying more shares after the EV maker reported mixed quarterly results and the stock slumped more than 14%.
In 2025, Wood’s flagship Ark Innovation ETF gained 35.49%, far outpacing the S&P 500’s return of 17.88% in the same period. But so far this year, Ark Innovation ETF (ARKK) is down 7.68% as of July 23, while the S&P 500 surged 8.28%, Yahoo Finance data shows.
Wood gained a reputation after Ark Innovation ETF delivered a 153% return in 2020. But her style also brings painful losses in bearish markets, as seen in 2022, when the fund tumbled more than 60%.
Those swings have weighed on Wood’s long-term gains. As of July 24, Ark Innovation ETF has delivered a five-year annualized return of -9.95%, while the S&P 500 has an annualized return of 10.93% over the same period, according to data from Morningstar.
Cathie Wood flags “the deflationary impact” of tech innovation
Wood focuses on high-tech companies across artificial intelligence, blockchain, biomedical technology, and robotics. She thinks these businesses have strong growth potential, though their volatility often causes fluctuations in the Ark’s funds.
From 2014 to 2024, Ark Innovation ETF wiped out $7 billion in investor wealth, according to a March 2025 analysis by Morningstar’s analyst Amy Arnott. That made it the third-biggest wealth destroyer among mutual funds and ETFs in Arnott’s ranking. The analyst hasn’t updated her ranking.
Wood believes investors have been focusing on the wrong signals as they assess the outlook for inflation, interest rates, and stocks.
In a June post on X, Wood said the bond market is increasingly reflecting the deflationary impact of technological innovation, particularly artificial intelligence, rather than the inflation risks many investors still fear.
Wood pointed to the continued flattening of the Treasury yield curve despite a sharp rise in oil prices over the past year. In previous cycles, she noted, an energy shock of that magnitude would have pushed long-term yields higher.
Related: Cathie Wood sells $11.7 million of tumbling semiconductor stock
Wood believes the bond market is “discounting something much more powerful: the deflationary impact of technological innovation, particularly artificial intelligence, which is beginning to increase productivity across broad swaths of the economy. ”
She also said easing tensions with Iran and a decline in oil prices could push inflation even lower.
“The next phase of this cycle could be characterized by accelerating growth, declining inflation, falling interest rates, and a strengthening U.S. dollar,” Wood said. “That combination would create a remarkably supportive backdrop for innovation-led equities and the technologies driving the next productivity boom.”
Not all investors agree with Wood’s optimism. Over the past 12 months through July 17, Ark Innovation ETF saw roughly $1.42 billion in net outflows, according to data from ETF research firm VettaFi.
Cathie Wood buys $50.1 million of Tesla stock
On July 23, Wood’s Ark funds bought 160,151 shares of Tesla Inc (TSLA), according to Ark’s daily trade information. Based on the latest trading price of $313.03, the shares are valued at about $50.1 million.
Tesla is now the worst-performing Magnificent Seven stock this year, down 30.39% as of July 24’s close.
Wood’s purchase came after the EV maker posted mixed second-quarter results this week, which sent its stock down.
Related: Cathie Wood buys $8.7 million of beaten-down AI stock
On July 22, Tesla reported adjusted earnings of 33 cents per share, missing analyst expectations of 51 cents. Revenue came in at $28.24 billion, beating estimates of $25.71 billion, according to CNBC.
Shares fell 14.52% on July 23 and 2% on July 24 following the release.
Automotive revenue, Tesla’s largest business, climbed 23% to $20.52 billion, while energy revenue increased 13% to $3.14 billion. Services and other revenue jumped 50% to $4.58 billion.
Despite the revenue beat, Tesla’s gross margin fell to 16.8% from 17.2% a year earlier, missing analysts’ expectations of 19.4%. The company said lower average selling prices and a decline in regulatory credit revenue weighed on profitability.
The earnings report comes after Tesla earlier this month reported a 25% year-over-year increase in second-quarter vehicle deliveries, ending two consecutive quarters of annual declines.
During the quarter, Tesla shifted its sales mix toward lower-priced versions of the Model 3 and Model Y after retiring its higher-priced Model S and Model X.
Tesla CEO Elon Musk has increasingly focused Tesla on AI and robotics, expanding its Robotaxi ambitions and Optimus humanoid robots.
“We’ll continue to scale, I think, very rapidly,” Musk said of Robotaxi during the second quarter earnings call. “It looks like more than 10% per week, in terms of miles driven. That’s a very high growth rate.”
Bank of America reiterated its buy rating and $460 price target for Tesla stock following its earnings call, saying the company is still in the early stages of monetizing its autonomous driving technology.
“We see autonomous vehicles spurring the next era of mobility and as the most significant change agent in the Auto 2.0 landscape, offering consumers more time, safer travel, and more accessible transportation,” the analysts wrote in a recent research note sent to TheStreet
Wood has long been bullish on Tesla stock. She predicted last year that the stock would reach $2,600 by 2030, which would value the company at over $9 trillion.
This forecast is heavily weighted on the assumption that Tesla’s robotaxi fleet will account for 90% of its total value.
“90% of that valuation comes not 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 X post that she experienced Tesla’s robotaxi fleet in Austin. “Smooth ride, no driver. It’s remarkable to see 10+ years of real-world AI training manifesting in a fully autonomous service,” Wood wrote, adding that her Robotaxi got a $75 parking ticket, which she described as “a new operating expense line item for our Tesla model.”
Tesla is the top holding in Ark Innovation ETF.
Top 10 Holdings in Ark Innovation ETF by Portfolio Weight as of July 24, 2026:
- Tesla (TSLA) – 9.38%
- Tempus AI (TEM) – 4.94%
- Space Exploration Technologies (SPCX) – 4.66%
- CRISPR Therapeutics (CRSP) – 4.64%
- Coinbase (COIN) – 4.42%
- Advanced Micro Devices (AMD) – 4.35%
- Robinhood Markets (HOOD) – 4.33%
- Shopify (SHOP) – 4.21%
- Circle Internet Group (CRCL) – 3.65%
- 10x Genomics (TXG) – 3.40%
Other than buying Tesla shares, Wood’s latest trades included buying Circle Internet Group (CRCL), WeRide (WRD), Kodiak AI (KDK), and Pony AI (PONY).
She also trimmed positions in Figma (FIG), 10x Genomics (TXG), Twist Bioscience (TWST), Deere (DE), Brera Holdings (SLMT), Strata Critical Medical (SRTA), Iridium Communications (IRDM), and Caterpillar (CAT).
