Cathie Wood sells $16.2 million of tumbling megacap stock

Cathie Wood, chief of Ark Investment Management, has built a reputation for backing disruptive tech companies.

Yet Wood recently reduced one of her highest-conviction investments, Tesla, after the stock fell roughly 6.23% over the past month and is down more than 9% 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 down 2.85%, while the S&P 500 surged 8.56%, 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 12, the Ark Innovation ETF has delivered a five-year annualized return of -8.06%, while the S&P 500 has an annualized return of 11.84% over the same period, according to data from Morningstar.

Cathie Wood expects a rate cut

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.

Getty Images

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 said on the June 5 episode of "In the Know" that she is closely watching June 17, when Kevin Warsh, the new Federal Reserve chair, announces the next interest rate decision.

“I do believe Kevin Warsh knows that interest rates have to come down, mortgage rates at least. And if inflation comes down as productivity is increasing, no matter how strong the economy is, I think he will cut rates,” Wood said.

Related: Cathie Wood buys $4.3 million of tumbling tech stock

Wood argued that productivity improvements brought by technology are helping drive the economy while reducing inflation. She added that oil prices already appear to be peaking and could fall further if the Iran war is resolved.

Wood also pointed to early signs that some companies are cutting prices.

“We're hearing other companies like Walmart and Costco saying that they are not passing price increases through as much as one would expect because they are seeing efficiency gains and productivity thanks in large part to AI and robotics,” Wood added.

In a March Bloomberg podcast, Wood says the global economy is not heading into a downturn, but into what she calls a “great acceleration” driven by AI and other breakthrough technologies.

“We’re not going into the Great Depression, we’re going into the great acceleration,” Wood said. “These technologies are deflationary… AI training costs are dropping 75% per year, and inference costs are falling as much as 85% to even 98% annually.”

Not all investors agree with Wood’s optimism. Over the past 12 months through June 11, the ARK Innovation ETF saw roughly $294.27 million in net outflows, according to data from ETF research firm VettaFi. 

Cathie Wood sells $16.2 million of Tesla stock

On June 12, Wood’s ARK Next Generation Internet ETF (ARKW) sold 39,850 shares of Tesla (TSLA). Based on the latest closing price of $406.43, these stocks were worth about $16.2 million. 

On June 12, Tesla stock gained 1.83% after Elon Musk's SpaceX opened for trade. SpaceX shares surged 19% on their first day of trading, helping push Musk's net worth above $1 trillion and making him the world's first trillionaire. Musk also serves as Tesla's CEO.

Related: Cathie Wood may have timed her Elon Musk bet just right

Tesla reported mixed first-quarter results in April. Adjusted earnings came in at 41 cents per share, ahead of Wall Street expectations of 37 cents. However, revenue of $22.39 billion missed analysts' estimates of $22.64 billion as the company's core electric vehicle business remained under pressure, CNBC reported.

The EV maker delivered 358,023 vehicles during the first quarter, down from the previous quarter but about 6% higher than a year earlier. Tesla has recorded annual declines in the past two years, with a drop in the year-ago quarter partially attributable to production disruptions related to Model Y factory upgrades.

Musk has increasingly focused investors' attention on Tesla's autonomous driving ambitions and humanoid robot projects. The company is currently testing a limited robotaxi service in Texas, although vehicle sales still account for the vast majority of Tesla's revenue.

Piper Sandler analyst Alexander Potter said in a recent research note that many investors remain skeptical about Tesla's Full Self-Driving technology, often citing Waymo's larger robotaxi operation as a reason to question Robotaxi, according to a recent research note.

Despite the skepticism, Potter believes Tesla has effectively achieved Level 4 autonomy. He pointed to the company's expansion of robotaxi services, Cybercab development, insurance offerings, and efforts to build robotaxi infrastructure. 

Furthermore, the analyst says that in April, his Tesla drove him from Missoula to Minneapolis, thus reinforcing his conviction. Piper has an Overweight rating on the shares with a price target of $500.

Tesla stock is down 9.63% year-to-date, ranking fifth among the Magnificent Seven group. The stock trails Alphabet (+14.91%), Nvidia (+10.02%), Apple (+7.09%), and Amazon (+3.35%), but has outperformed Meta (-14.11%) and Microsoft (-19.21%).

Wood predicted last year that Tesla’s 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 recently 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.”

The recent selling is probably just a profit-taking move. Tesla remains the top holding in both the Ark Innovation ETF and the Ark Next Generation Internet ETF.

Top 10 holdings of the Ark Innovation ETF as of June 12, 2026:

• Tesla Inc. (TSLA) 10.48%
• Tempus AI Inc. (TEM) 5.24%
• Robinhood Markets Inc. (HOOD) 5.02%
• Advanced Micro Devices Inc. (AMD) 4.95%
• CRISPR Therapeutics AG (CRSP) 4.92%
• Shopify Inc. (SHOP) 4.53%
• Roku Inc. (ROKU) 4.11%
• Coinbase Global Inc. (COIN) 3.80%
• Circle Internet Group Inc. (CRCL) 3.78%
• Twist Bioscience Corp. (TWST) 3.18%

Wood’s trading activity in the past week was mostly focused on trimming positions. Other than selling Tesla, she also sold shares of Advanced Micro Devices (AMD), Rocket Lab (RKLB), Roku (ROKU), and Chinese tech firm Baidu (BIDU). Her main purchase was the newly listed Space Exploration Technologies (SPCX), or SpaceX.

Related: Goldman Sachs doubles down on stock market outlook for 2026