Cathie Wood, chief of Ark Investment Management, often trims her biggest winners after sharp rallies.
This week, she’s selling Tempus AI (TEM), taking some shares off the table after the healthcare AI stock surged nearly 30% in days and became the second-largest holding in her fund.
Last year, the flagship Ark Innovation ETF gained 35.49%, far outpacing the S&P 500’s return of 17.88% in the same period. So far this year, Wood’s flagship Ark Innovation ETF (ARKK) is up 10.16% as of Aug. 26, while the S&P 500 surged 12.13%, Yahoo Finance data show.
Wood gained a reputation after the Ark Innovation ETF delivered a 153% return in 2020. But 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 Aug. 26, her Ark Innovation ETF has delivered a five-year annualized return of -6.21%, while the S&P 500 has an annualized return of 11.42% over the same period, according to data from Morningstar.
Cathie Wood says AI could help sustain high corporate profits
Wood usually focuses on high-tech companies across artificial intelligence, blockchain, biomedical technology, and robotics. She believes these businesses have strong growth potential, though their volatility often causes fluctuations in the Ark’s funds.
Over the decade ended 2025, the Ark Innovation ETF wiped out nearly $5 billion in investor wealth, according to an analysis by Morningstar’s analyst Amy Arnott. That made it the fourth-biggest wealth destroyer among mutual funds and ETFs in the ranking.
Wood remains optimistic about AI, which she sees as a major driver of productivity, economic growth, and corporate profits in the years ahead.
In an Aug. 9 post on X (the former Twitter), Wood said U.S. corporate profits remain unusually strong, with domestic profits before tax at 13.2% of GDP, a level she said is near multi-decade highs.
Related: Cathie Wood buys $28.1 million of popular tech stock
Some of that strength came from the massive monetary and fiscal stimulus during the pandemic, but Wood believes another factor is helping sustain margins today: companies are leaning into AI and productivity gains to protect them.
“I think we’re still early in seeing how far that can go,” she said, adding that companies that use AI effectively will “separate themselves from the ones that don’t.”
Wood also found reasons for optimism in the latest U.S. jobs report, despite nonfarm payrolls falling by 23,000.
“It’s not as scary as it looks,” she said, pointing to higher prime age labor force participation, cooling wages and productivity growth approaching 3%. She also suggested AI may be helping accelerate baby boomer retirements.
Not all investors agree with Wood’s optimism. Over the past 12 months through Aug. 25, the Ark Innovation ETF saw roughly $1.7 billion in net outflows, according to data from ETF research firm VettaFi.
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Cathie Wood sells $4 million of Tempus AI stock
On Aug. 25, Wood’s Ark Innovation ETF sold 57,819 shares of Tempus AI Inc (TEM), according to Ark’s daily trading information. Based on the latest closing price of $68.48, these stocks were worth about $4 million.
Tempus AI is a healthcare tech company that provides AI-driven diagnostic tools that help doctors make treatment decisions. It also sells the data generated from its tests to pharmaceutical companies for drug development.
Since Aug. 18, Tempus AI stock has soared more than 38%, with most of the gains coming after Merck (MRK) and Moderna (MRNA) provided an update on a late-stage trial of their personalized cancer vaccine.
The rally has pushed Tempus stock’s year-to-date gain to roughly 16%.
Wall Street is also getting more bullish on the AI healthcare company.
Related: Cathie Wood buys $22.3 million of surging semiconductor stock
BTIG analyst Mark Massaro raised his price target on Tempus AI to $80 from $70 on Aug. 20 while maintaining a Buy rating, The Fly reported.
Massaro pointed to Tempus’ potential role in the Merck-Moderna cancer vaccine program. Tempus has confirmed that it plans to serve as the sequencing provider for the program if the vaccine receives FDA approval, according to BTIG.
The analyst said the opportunity could effectively create a new “pharma services” revenue business for Tempus.
That was a quick reversal for BTIG. Earlier this month, the firm had lowered its Tempus AI price target to $70 from $80 following the company’s second-quarter earnings, while keeping its Buy rating, StockTwits reported.
At the time, BTIG said Tempus delivered a small second-quarter beat and raised its 2026 guidance. The firm also highlighted Tempus’ pending acquisition of Personalis and said its early efforts in molecular residual disease, or MRD, testing were gaining momentum.
On July 30, Tempus reported second-quarter revenue of $382.5 million, up 22% from a year earlier. Diagnostics revenue rose 20% to $289.3 million, while Data and Applications revenue climbed 28% to $93.2 million.
Oncology testing volume increased 31% year over year, while MRD testing volume reached 9,000 tests, up from 6,500 in the previous quarter.
Tempus also reported adjusted EBITDA of $8 million, compared with an adjusted EBITDA loss of $5.6 million a year earlier.
The company raised its full-year revenue outlook to between $1.595 billion and $1.605 billion, representing roughly 25% annual growth. Tempus continues to expect about $65 million in adjusted EBITDA for the year.
The latest rally has also made Tempus increasingly important to Wood.
A month ago, the Ark Innovation ETF was up only some 3% year to date. Since then, the fund has rallied, helped in large part by a surge in Tempus AI, now its second-largest holding. Wood’s recent sales of Tempus shares are likely just taking profits after the rally rather than backing away from the stock.
Top 10 holdings in the Ark Innovation ETF by weight and market value as of Aug. 25, 2026:
- Tesla (TSLA): $594.9 million, 9.26%
- Tempus AI (TEM): $401.7 million, 6.25%
- SpaceX (SPCX): $377.7 million, 5.88%
- Circle Internet Group (CRCL): $343.1 million, 5.34%
- CRISPR Therapeutics (CRSP): $306.8 million, 4.77%
- Coinbase Global (COIN): $295.9 million, 4.61%
- Twist Bioscience (TWST): $258.0 million, 4.02%
- Shopify (SHOP): $242.9 million, 3.78%
- Robinhood Markets (HOOD): $237.1 million, 3.69%
- Palantir Technologies (PLTR): $203.8 million, 3.17%
Wood has long been bullish on the combination of artificial intelligence and healthcare, calling healthcare “the most profound application of AI” in an interview with Bloomberg.
“It includes the convergence of sequencing technologies, AI, and gene editing,” Wood said. “We have 35 to 40 trillion cells in our body generating data, and AI is a data project.”
Other than buying Tempus AI shares, Wood’s latest trades included buying shares of Broadcom (AVGO), Cerebras Systems (CBRS) and Perceptive Capital Solutions (FRNM).
She also trimmed positions in Twist Bioscience (TWST), Roblox (RBLX), Advanced Micro Devices (AMD), and Brera Holdings (SLMT).
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