Cathie Wood, chief of Ark Investment Management, often buys her highest-conviction stocks during sharp pullbacks. That’s exactly what she’s doing with Nvidia (NVDA), adding more shares after the semiconductor giant fell more than 6% over the past five trading days.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 6.38% as of July 30, while the S&P 500 surged 8.65%, Yahoo Finance data shows.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 July 29, her Ark Innovation ETF has delivered a five-year annualized return of -10.16%, while the S&P 500 has an annualized return of 10.61% over the same period, according to data from Morningstar.
Over the past 12 months through July 28, the Ark Innovation ETF saw roughly $1.3 billion in net outflows.Getty Images
Cathie Wood flags “the deflationary impact” of tech innovationWood 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.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.In a June 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. Related: Cathie Wood buys $50.1 million of tumbling megacap stockWood 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 July 28, the Ark Innovation ETF saw roughly $1.3 billion in net outflows, according to data from ETF research firm VettaFi. Cathie Wood buys $14.3 million of Nvidia stockOn July 28, Wood’s Ark funds bought 73,166 shares of NVIDIA Corporation (NVDA), according to Ark’s daily trade information. Based on the latest trading price of $195.04, the shares are valued at about $14.3 million.Nvidia stock dropped 6.57% over the past five trading days, bringing its year-to-date gains to 4.58%. But its chip-maker peer, AMD, gained 126.55% over the same period, with the Philadelphia Semiconductor Index rallied 57.66%.Big Tech capex spending has been a major focus for semiconductor investors. But recent earnings showed the market isn’t rewarding higher spending across the board.Related: Overlooked AI stock is growing faster than NvidiaMicrosoft kept its fiscal 2026 capex outlook unchanged, a rare show of restraint that investors rewarded. Meta only raised the low end of its forecast to $130 billion-$145 billion from $125 billion-$145 billion.Alphabet increased its capex outlook to $195 billion-$205 billion from $180 billion-$190 billion, but Google stock fell after the announcement.The SOX fell for five consecutive trading days after Alphabet’s earnings but bounced 8.2% on July 30 after Microsoft and Meta reported results.But AI spending isn’t the only story driving Nvidia stock right now.Nvidia is providing a backstop of up to $250 billion to OpenAI that would help it raise debt for a 10-gigawatt data center campus in Ohio, The Wall Street Journal reported. In total, the project could cost more than $500 billion.The size of the backstop appeared to unsettle investors, sending Nvidia shares down 5% on July 27 after the news.Nvidia’s first-quarter fiscal 2027 results also highlighted some underlying risks. Of its $58 billion in net income, $13.4 billion came from unrealized equity gains rather than operations, according to a report.More Cathie Wood:Cathie Wood buys $22.8 million of surging tech stockCathie Wood buys $2.1M of tumbling AI stockCathie Wood buys $5.5M of surging tech stockThe company also remains heavily dependent on a small group of big customers, with three hyperscalers accounting for 54% of revenue. Nvidia’s next earnings report is scheduled for August 26.Still, Nvidia stock looks cheap right now, with its forward price-to-earnings ratio of 17.53, its lowest since April 1, 2015, according to Barron’s. Wood hasn’t been so active on Nvidia shares this year compared to her other tech favorites. She bought 300,017 shares on June 1 and another 5,409 shares on May 18, while selling a combined 213,560 shares on March 26 and 27. Those are her only Nvidia trades so far in 2026.Nvidia is not one of the top 10 holdings in the Ark Innovation ETF.Top 10 Holdings in the Ark Innovation ETF by Portfolio Weight as of July 30, 2026:Tesla (TSLA) – 9.41%SpaceX (SPCX) – 5.11%Shopify (SHOP) – 4.95%CRISPR Therapeutics (CRSP) – 4.74%Tempus AI (TEM) – 4.67%Coinbase (COIN) – 4.60%Robinhood Markets (HOOD) – 3.81%Circle Internet Group (CRCL) – 3.77%Advanced Micro Devices (AMD) – 3.62%Roblox (RBLX) – 3.40%Other than buying Nvidia shares, Wood’s latest trades included buying Taiwan Semiconductor (TSM), Kratos Defense & Security Solutions (KTOS), BWX Technologies (BWXT), X-Energy (XE), and a small amount of Tesla (TSLA).She also trimmed positions in Shopify (SHOP), BitMine Immersion Technologies (BMNR), CRISPR Therapeutics (CRSP), Twist Bioscience (TWST), Robinhood Markets (HOOD), Natera (NTRA), Roblox (RBLX), Alphabet (GOOGL), Amazon (AMZN), 10x Genomics (TXG), Block (XYZ), Figma (FIG), Illumina (ILMN), and Bullish (BLSH).Related: The AI secret behind Qualcomm’s price hike