Cathie Wood Invests $12 Million in AI Stock Amid Volatility

Cathie Wood, Ark Investment Management CEO, has bought $12 million of a popular tech stock that has fallen 36% after earnings. Her funds have experienced a volatile ride this year, swinging from sharp losses to strong gains. The flagship Ark Innovation ETF is up 33.7% year-to-date, far outpacing the S&P 500's 9.7% gain. Wood's strategy involves buying shares in emerging high-tech companies, but their volatility leads to major fluctuations in Ark funds' values.

Cathie Wood, CEO of Ark Investment Management, has recently purchased $12 million worth of shares in CoreWeave Inc. (CRWV), a cloud infrastructure company specializing in GPU-accelerated computing for artificial intelligence and machine learning workloads. This move comes after CoreWeave's stock tumbled 20.8% on August 13 and another 15.5% on August 14, following earnings that showed a larger-than-expected loss as the company increased spending to meet surging demand [1].

CoreWeave posted a second-quarter loss of 60 cents per share, much wider than Wall Street analysts' forecast of a loss of 45 cents. However, revenue jumped 207% from a year earlier to $1.21 billion, topping estimates. Operating expenses in Q2 nearly quadrupled, rising 276% to $1.19 billion. The company is scaling rapidly to meet the unprecedented demand for AI, but this has led to a significant drop in its operating margin from 20% a year ago to 2% [1].

Despite the recent drop, CoreWeave stock is still up 156% since its March debut. Wood's purchase reflects her strategy of buying shares in emerging high-tech companies, even when their stock prices fall. This approach has led to significant fluctuations in Ark funds' values, with the Ark Innovation ETF (ARKK) delivering a five-year annualized return of negative 1.4%, while the S&P 500 has an annualized return of 15.6% over the same period [1].

Wood's investment strategy involves identifying companies with the potential to reshape industries, but their volatility leads to major fluctuations in Ark funds' values. 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 [1].

References:
[1] https://finance.yahoo.com/news/cathie-wood-buys-12-million-220025270.html
[2] https://www.benzinga.com/etfs/broad-u-s-equity-etfs/25/08/47080244/cathie-wood-just-dropped-12-9-million-on-this-trendy-robotaxi-stock-ark-also-loads-up-on-amazon-shares