Cathie Wood, head of Ark Investment Management, often makes moves in some of her favorite tech stocks around earnings season.
That’s exactly what she’s doing with Broadcom (AVGO), adding shares of the chipmaker ahead of its upcoming earnings report.
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. But so far this year, Wood’s flagship Ark Innovation ETF (ARKK) is up 4.28% as of Aug. 12’s writing, while the S&P 500 surged 13.23%, 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. 11, her Ark Innovation ETF has delivered a five-year annualized return of -7.70%, while the S&P 500 has an annualized return of 11.68% 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.
Related: Cathie Wood sells $5.5 million of surging tech stock
In a recent 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.
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. 10, the Ark Innovation ETF saw roughly $1.48 billion in net outflows, according to data from ETF research firm VettaFi.
Cathie Wood buys $16.2 million of Broadcom stock
On Aug. 10, Wood’s Ark funds bought a total of 39,020 shares of Broadcom Inc. (AVGO), according to Ark’s daily trading information. Based on the latest closing price of $416.08, these stocks were worth about $16.2 million.
Shares of Broadcom are up 21% year to date, outperforming the S&P 500 but lagging the Philadelphia Semiconductor Index (SOX)’s gain of 73.8%.
Much of that underperformance followed a sharp post-earnings sell-off. Broadcom shares tumbled 12.59% on June 4 after the company delivered disappointing quarterly results, then fell another 7.92% on June 5 amid a broader market sell-off.
Related: Veteran analyst rethinks Palantir stock after earnings
On June 3, Broadcom reported fiscal second-quarter adjusted earnings of $2.44 a share, topping analysts’ expectations of $2.40. Revenue came in at $22.19 billion, below the $22.27 billion analysts had expected, CNBC reported.
For the fiscal third quarter, which Broadcom is set to report on Sept. 2, the company forecast revenue of about $29.4 billion, ahead of Wall Street estimates of $28.53 billion. But investors were disappointed that Broadcom did not raise its forecast for more than $100 billion in AI semiconductor revenue by fiscal 2027.
Broadcom remained optimistic about its longer-term AI growth prospects. “We expect this momentum to continue into fiscal year 2027 and reiterate our AI semiconductor revenue guidance to be in excess of $100 billion,” Broadcom’s CEO Hock Tan said during an earnings call.
Semiconductor stocks have pulled back in recent weeks, giving back some of their gains after a strong rally earlier this year.
The Philadelphia Semiconductor Index has lost roughly 4% over the past month and is now about 15% below its June high.
Bank of America attributed the recent weakness partly to concerns about rising semiconductor costs, particularly memory chips, as well as seasonal volatility following the SOX’s more than 80% rally in the second quarter.
“We see correction as a summer reset, not a fundamental reversal,” the analysts said in a July research note. They noted that semiconductors have experienced nine corrections of more than 10% since ChatGPT launched in November 2022, with declines averaging about 14% over 31 days.
Bank of America remains bullish on leading chip stocks, including Broadcom, Nvidia (NVDA), AMD (AMD), and Micron (MU), and expects global AI spending to more than double to about $1.7 trillion by 2030.
Broadcom is currently not among the Ark Innovation ETF’s top 10 holdings.
Top 10 holdings in the Ark Innovation ETF by portfolio weight as of Aug. 11, 2026:
- Tesla (TSLA): 9.15%
- SpaceX (SPCX): 6.02%
- Tempus AI (TEM): 5.42%
- Shopify (SHOP): 4.74%
- CRISPR Therapeutics (CRSP): 4.66%
- Circle Internet Group (CRCL): 4.25%
- Twist Bioscience (TWST): 4.03%
- Coinbase Global (COIN): 3.98%
- Palantir Technologies (PLTR): 3.72%
- Robinhood Markets (HOOD): 3.51%
Other than buying Broadcom shares, Wood’s latest trades included buying Cloudflare (NET), Nvidia (NVDA), Teradyne (TER), Intellia Therapeutics (NTLA), Cerus (CERS), and Schrodinger (SDGR).
She also trimmed positions in Deere (DE), Palantir Technologies (PLTR), Shopify (SHOP), Snowflake (SNOW), 10x Genomics (TXG), Twist Bioscience (TWST), Elbit Systems (ESLT), Iridium Communications (IRDM), and Brera Holdings (SLMT).
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