Cathie Wood sells $8.7 million of tumbling AI stock

Cathie Wood, head of Ark Investment Management, is known for making bold bets on disruptive tech companies.

Yet Wood recently reduced one of her favorite investments, Palantir, after the stock fell roughly 28% year to date.

In 2025, the 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, Wood’s flagship Ark Innovation ETF (ARKK) is up 1.58%, while the S&P 500 surged 9.60%, Yahoo Finance data shows.

Wood gained a reputation after the Ark Innovation ETF delivered a 153% return in 2020. However, her style also brings painful losses in bearish markets, as seen in 2022, when the Ark Innovation ETF tumbled more than 60%.

Those swings have weighed on Wood’s long-term gains. As of June 17, the Ark Innovation ETF has delivered a five-year annualized return of -7.76%, while the S&P 500 has an annualized return of 11.94% over the same period, according to data from Morningstar.

Cathie Wood expects accelerating growth and declining inflation

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.

According to Morningstar analyst Bella Albrecht, two of Wood’s Ark funds were among the worst-performing ETFs in the first quarter of 2026. The Ark Next Generation Internet ETF (ARKW) ranked second on the list, while the ARK Innovation ETF placed fifth.

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From 2014 to 2024, the 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.

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In a June 5 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. 

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 June 16, the ARK Innovation ETF saw roughly $516.88 million in net outflows, according to data from ETF research firm VettaFi. 

Cathie Wood sells $8.7 million of Palantir stock

On June 15, Wood’s Ark Innovation ETF sold 66,259 shares of Palantir (PLTR). Based on the latest closing price of $130.63, these stocks were worth about $8.7 million. 

Shares of Palantir have dropped 28% year to date as of writing, as investors have grown concerned about the stock's lofty valuation following its massive rally in 2025.

Related: Cathie Wood buys $99 million of megacap stock

Still, Wolfe Research recently upgraded Palantir stock to Peer Perform from Underperform without a price target after resuming coverage of the name. The firm says Palantir's current valuation reflects much of its improved growth and margin outlook, The Fly reported on June 16.

On May 4, Palantir posted stronger-than-expected first-quarter results and raised its outlook for the rest of the year.

Adjusted earnings came in at 33 cents per share, ahead of the 28 cents analysts had expected. Revenue rose to $1.63 billion, topping forecasts of $1.54 billion.

The company’s revenue grew 85% from a year earlier, its fastest growth rate since going public in 2020.

Despite the strong report, Palantir shares dropped 7% the next day as U.S. commercial revenue came in at $595 million, below the $605 million Wall Street had expected. Investors have set a high bar for the company, leaving little room for disappointment.

Palantir was one of Wood’s darlings several months ago. While the stock is no longer among her top 10 holdings, that likely reflects the impact of her other trades rather than a change in her view on the company.

“There’s nothing like [Palantir] in the software space,” Wood said in a CNBC interview in 2025. “It is, we believe, going to dominate the biggest part of the tech stack when it comes to AI. And that’s the platform as a service part of the stack.”

Aside from the recent selling, Wood made only two other Palantir trades this year. On Jan. 8, she sold 58,741 shares. Then on April 10, she added 85,485 shares.

Top 10 holdings of the Ark Innovation ETF as of June 18, 2026:

• Tesla Inc. (TSLA) 9.50%
• Robinhood Markets Inc. (HOOD) 4.93%
• CRISPR Therapeutics AG (CRSP) 4.87%
• Tempus AI Inc. (TEM) 4.83%
• Space Exploration Technologies Corp. (SPCX) 4.71%
• Advanced Micro Devices Inc. (AMD) 4.51%
• Shopify Inc. (SHOP) 4.07%
• Coinbase Global Inc. (COIN) 3.85%
• Circle Internet Group Inc. (CRCL) 3.45%
• Twist Bioscience Corp. (TWST) 3.33%

Other than selling Palantir positions, Wood's recent trading activity included buying shares of Eli Lilly (LLY) and Coinbase Global (COIN). 

Meanwhile, she trimmed a wide range of holdings, including Roku (ROKU), Advanced Micro Devices (AMD), Tesla (TSLA), Amazon (AMZN), Shopify (SHOP), CoreWeave (CRWV), Taiwan Semiconductor Manufacturing (TSM), SoFi Technologies (SOFI), Figma (FIG), Kratos Defense & Security Solutions (KTOS), Natera (NTRA), and Pacific Biosciences of California (PACB).

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