Cathie Wood buys $23 million of beaten down stock

Cathie Wood’s flagship Ark Innovation ETF is down 10% year-to-date.

May 4, 2025 - 14:48

Cathie Wood buys $23 million of beaten down stock

Cathie Wood, chief of Ark Investment Management, is best known for trading high-growth tech names.

But this week, she took an unexpected shift, buying millions worth of a consumer-oriented stock that's been under pressure. The trade came just before and after the company’s quarterly earnings report.

Wood’s funds saw a short-lived boost after Donald Trump won the presidency last November, but the gains didn’t last.

Her flagship fund, the Ark Innovation ETF (ARKK) , is down roughly 9.91% year-to-date as of May 2, underperforming both the S&P 500 and Nasdaq, which are down 3.31% and 6.90%, respectively.

Wood’s remarkable 153% gain in 2020 helped build her reputation and attract loyal investors, but her long-term performance has made others skeptical of her aggressive style.

As of May 2, Ark Innovation ETF, with nearly $5 billion under management, has delivered an annualized three-year return of 1.16% and a five-year return of 0.31%.

The S&P 500 index, by contrast, has a three-year annualized return of 12.75% and a five-year return of 16.75%.

The Ark Innovation ETF has seen a net outflow of $2.31 billion over the past 12 months through April 29.
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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.

Wood says these companies have the potential to reshape industries, but their volatility leads to major fluctuations in Ark funds' values.

The Ark Innovation ETF wiped out $7 billion in investor wealth over the 10 years ending in 2024, according to a recent analysis by Morningstar’s analyst Amy Arnott. That made it the third-biggest wealth destroyer among mutual funds and ETFs in Arnott’s ranking.

Wood recently raised concerns about Trump’s tariffs and warned of a bear market or recession if the tariffs are not handled carefully. Still, she’s hopeful that negotiations could ease tensions.

“Trump wants to be one of the greatest presidents ever... he’s not going to get there by throwing the economy into a recession and the stock market into a bear market,” she said.

Not all investors share Wood's optimism. The Ark Innovation ETF has seen a net outflow of $2.31 billion over the past 12 months through April 29, according to ETF research firm VettaFi.

Cathie Wood buys $23.7 million of Airbnb stock.

Cathie Wood’s Ark Invest has been snapping up shares of Airbnb Inc. (ABNB) , signaling renewed confidence in the vacation rental platform despite its modest growth outlook.

On April 28, Wood’s Ark funds purchased 60,068 shares ahead of Airbnb’s first-quarter earnings. Two days later, after results were announced, she bought another 49,560 shares. That chunk of stock is valued at roughly $13.7 million.

The purchases followed a $10 million buy last week, when Ark picked up 80,361 shares. Wood has invested about $23.7 million in Airbnb stock in recent days.

Airbnb reported first-quarter results on May 1 that were mostly in line with expectations. Revenue came in at $2.27 billion, up 6% year-over-year, just ahead of the $2.26 billion analysts expected. Earnings of 24 cents per share aligned with Wall Street's forecast, but they fell 42% from a year ago's 41 cents.

For the current quarter, the company issued a slightly softer revenue forecast. It expects between $2.99 billion and $3.05 billion, with the midpoint slightly below the $3.04 billion Wall Street had projected.

“In the U.S., we’ve seen relatively softer results, which we believe has been largely driven by broader economic uncertainties,” the company wrote in a letter to shareholders.

Benchmark analysts lowered their price target for Airbnb to $155 from $178 following the report while keeping a buy rating, thefly.com reported.

Fund manager buys and sells

“Now is when things really start to get interesting,” they wrote, adding that Airbnb's path to accelerating growth over the next few years "looks more likely than the alternative," despite "some fits and starts."

Airbnb stock has dropped 22.4% since its peak in mid-February. The stock is not among the top 10 holdings in the Ark Innovation ETF, but the recent purchases suggest Wood sees opportunity ahead.