Cathie Wood Is Betting Big on These 2 AI Stocks

Cathie Wood’s comeback could continue through the year as most of her Ark Invest funds come roaring back alongside the tech trade. Though her broad basket of Ark funds hasn’t been as booming as your run-of-the-mill tech-centric index ETF (exchange-traded funds), which tends to be very heavy on the mega-cap Magnificent Seven companies, I do think that lower rates do bode well for the non-Mag Seven tech names that have been steadily forgotten about in recent years.

While Cathie Wood has some notable Mag Seven AI picks in her funds, it’s the picks beyond the Mag Seven names that are the main reason to pay the fees her funds command. In this piece, we’ll examine some of the big AI bets Ark funds have made in recent years and consider whether they can position the Ark to sail higher than the market in the coming year or two.

Meta Platforms

Meta Platforms (NASDAQ:META) appears to be Cathie Wood’s second favorite Mag Seven stock (behind Tesla (NASDAQ:TSLA)), with the 11th spot and a 2.6% weighting in the flagship Ark Innovation ETF (NYSEARCA:ARKK). With META shares surging close to 20% year to date, the multi-year rally is starting to go parabolic. And while I’d never suggest buying a stock that’s already hit an inflection point, I do think Meta’s aggressive AI spending plans (it’s seeking to spend between $60-65 billion on the effort) will make it one of the bigger winners in the medium term.

Undoubtedly, the rise of the incredibly cheap and efficient DeepSeek R1 model has been on the mind of Zuckerberg and his team. And while they recognize the implications of lower-cost models and the disruptive capacity of smaller fish—or whales in the case of DeepSeek—in the global tech waters, they don’t seem to be any less willing to rein in that spend. Indeed, Meta has already had its year of efficiency. And now, it’s looking to spend money to make (or save) money across its business.

With much of the spend going towards its open-source LLaMA model, its AI infrastructure (for its personal use), and perhaps automating mid-level software engineering and quality assurance tasks, Meta stands out as a Mag Seven name that’s more of a must-own if you want AI exposure at a reasonable price. At 29.8 times trailing price-to-earnings (P/E), the stock still isn’t as frothy as it could be.

Either way, the market doesn’t appear to have a problem with the AI bill Meta stands to rack up in 2025. If Meta can show that it can apply its AI to enhance its business, I’d look for it to steer mostly clear of DeepSeek-like risks that could cause a further re-evaluation of big tech’s big spending on AI.

Tempus AI

As the ninth-largest holding in ARKK, with a 4.1% weight, Tempus AI (NASDAQ:TEM) is a holding worth keeping tabs on. The $10.5 billion mid-cap firm is a health tech firm that’s leveraging AI for use in precision medicine.

With a rich library of clinical data and the know-how to apply AI in the health scene, Tempus AI stands out as a unique way to play AI’s ability to disrupt the health business. The company is doing a lot of exciting things in genomic diagnostics. Still, it’s tough to tell which one of Tempus’ many promising projects is poised to become an industry breakthrough.

Either way, it’s not just Cathie Wood who has been buying shares since going live on the public markets last year. Even U.S. politician and investor Nancy Pelosi has been a buyer of the intriguing AI stock. And while the firm’s CEO recently took profits on shares, I still think the name is worthy of the radar in case one of its nasty pullbacks strikes in the coming months.

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