Cathie Wood, head of Ark Investment Management, often trades around earnings, taking advantage of sharp moves in some of her favorite tech stocks.
That’s exactly what she’s doing with Palantir, trimming her position after the stock rallied following its latest earnings report.
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 2.75% as of August 6, while the S&P 500 surged 12.63%, 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 August 5, her Ark Innovation ETF has delivered a five-year annualized return of -9.36%, while the S&P 500 has an annualized return of 11.76% over the same period, according to data from Morningstar.
Cathie Wood flags “the deflationary impact” of tech innovation
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 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.
Related: Cathie Wood sells $5.5 million of surging tech stock
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 August 5, the Ark Innovation ETF saw roughly $1.42 billion in net outflows, according to data from ETF research firm VettaFi.
Cathie Wood sells $17 million of Palantir stock
On August 4 and 5, Wood’s Ark funds sold a total of 109,492 shares of Palantir Technologies Inc (PLTR), according to Ark’s daily trading information. Based on the latest closing price of $155.92, these stocks were worth about $17 million.
Shares of Palantir are down 12.28% year-to-date, trailing the S&P 500 Index’s rally of 12.63% as of August 6. However, the stock gained 27.53% over the past five trading days, largely helped by a single-day gain of nearly 30% on August 4, following the software company’s rosy earnings and outlook.
Related: Veteran analyst rethinks Palantir stock after earnings
For the second quarter, Palantir reported adjusted earnings of 41 cents a share, ahead of analysts’ estimates of 35 cents. Revenue jumped 93% year over year to $1.94 billion, beating expectations of $1.80 billion.
“To my knowledge, no businesses at our scale has even grown half this much,” Palantir’s CEO Alex Karp said in a CNBC interview. He also predicted that the strong growth will likely “go on for at least another 18 months.”
Earlier, a major concern for Palantir stock was that enthusiasm for software companies could fade as AI threatens their growth and profitability. But Palantir’s latest results suggest that it hasn’t happened yet.
Revenue from Palantir’s U.S. government business rose 90% from a year ago to $809 million. The company is best known for selling software to the U.S. government and military, but its commercial business has been growing even faster.
U.S. commercial revenue soared 149% year over year to $764 million and has increased 380% since 2024 on a compounded basis. The company now expects U.S. commercial revenue to exceed $3.42 billion in 2026, up from its previous forecast of $3.22 billion.
Palantir also raised its full-year revenue guidance to between $8.15 billion and $8.16 billion, up from its previous outlook of $7.65 billion to $7.66 billion.
Many Wall Street analysts raised their target for Palantir stock after the earnings. For example, Citi raised the firm’s price target on Palantir to $245 from $200 and maintained a buy rating, citing “stronger bookings, backlog and guidance.”
“The results further weaken the bear case around rising AI competition,” the analysts wrote in a research note sent to TheStreet.
“Palantir increasingly appears to be benefitting from enterprise demand for ‘AI sovereignty’ with use cases around model evaluation, fine-tuning, as opposed to traditional data integration.”
Wood has been very active in trading Palantir stock. She greatly increased her position in 2024 and sold many of those shares in 2025 as the stock climbed. In June, she bought back some shares. Now she’s selling again, likely locking in some gains after the post-earnings rally.
Palantir is currently not among the Ark Innovation ETF’s top 10 holdings. However, the stock is still a major holding across Wood’s family of ETFs, ranking fifth overall, according to a report.
Top 10 Holdings in the Ark Innovation ETF by Portfolio Weight as of August 6, 2026:
- Tesla (TSLA) – 9.37%
- Tempus AI (TEM) – 4.85%
- Shopify (SHOP) – 4.84%
- CRISPR Therapeutics (CRSP) – 4.82%
- SpaceX (SPCX) – 4.73%
- Coinbase (COIN) – 4.08%
- Twist Bioscience (TWST) – 3.91%
- Circle Internet Group (CRCL) – 3.90%
- Robinhood Markets (HOOD) – 3.63%
- Advanced Micro Devices (AMD) – 3.57%
Other than selling Palantir shares, Wood’s latest trades included buying Circle Internet Group (CRCL), SpaceX (SPCX), Nvidia (NVDA), GeneDx Holdings (WGS), and Twist Bioscience (TWST).
She also trimmed positions in Shopify (SHOP), Roblox (RBLX), and Brera Holdings (SLMT).
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