Kathy Wood, head of Arch Investment Management, doesn’t give up her favorite stocks easily.
That’s what she just did, buying one of her top properties that is down 15% year-to-date.
Wood gained notoriety after the flagship Ark Innovation ETF (ARKK) returned 153% in 2020. Last year, the fund gained 35.5%, which was more than the S&P 500’s return of 17.9% over the same period.
But her style also brought painful losses to the markets, as seen in 2022, when the Arc Innovation ETF fell more than 60%.
As of March 13, the Arc Innovation ETF is down nearly 10% year to date, while the S&P 500 is down 3%, Yahoo Finance data shows.
These swings weigh on Wood’s long-term gains. The Arc Innovation ETF has delivered a five-year annualized return of -11% as of writing, while the S&P 500 has an annualized return of 12.6% over the same period, according to Morningstar data.
In the 12 months through March 12, the Arc Innovation ETF saw net inflows of nearly $1.45 billion. Getty Images ยทGetty Images
Wood focuses on high-tech companies across artificial intelligence, blockchain, biomedical technology, and robotics. He thinks that these businesses have great growth potential, although their volatility often changes in Arc Funds.
From 2014 to 2024, the Arc Innovation ETF will wipe out $7 billion in investor wealth, according to an analysis by Morningstar analyst Amy Arnott. That made it the third biggest wealth destroyer among mutual funds and ETFs in Arnott’s rankings. The analyst has not updated the 2025 rating.
RELATED: Kathy Wood shares surprise message on oil prices
In a letter published in January, Wood said the US economy is storing energy for a rapid recovery in 2026.
“Despite sustained real gross domestic product growth over the past three years, the U.S. economy has been strained and is set in a mixed spring that may rebound strongly over the next few years,” Wood wrote.
Wood also dismisses talk of an “AI bubble,” saying it’s “years away” and coming from “the strongest period of investment in history.”
“What was once a cost constraint now appears to be AI, robotics, energy storage, blockchain technology, and multimix ordering platforms ready for prime time,” she said.
Not all investors agree with Wood’s optimism. In the 12 months through March 12, the Arc Innovation ETF saw net inflows of nearly $1.45 billion, according to ETF research firm VettaFi.
On March 11 and 12, Wood’s Ark Genomic Revolution ETF (ARKG) of Tempus AI Inc. (TEM) bought a total of 41,906 shares, valued at about $2.1 million, according to Ark’s daily trading data.
As of March 13, Tempus AI is the second largest holding in ARKG and the fourth largest holding in ARKK, accounting for approximately 9.5% and 5% respectively.
Tesla (TSLA) 10.57%
CRISPR Therapy (CRSP) 6.07%
Circle Internet Group (CRCL) 5.03%
Temps AI (TEM) 5.02%
Shopify (SHOP) 4.88%
Coinbase Global (COIN) 4.67%
Robin Hood Markets (HOOD) 4.49%
Roku (ROKU) 4.06%
Advanced Micro Devices (AMD) 3.82%
Palantir Technologies (PLTR) 3.59%
Tempus AI is a healthcare technology company that provides AI-powered diagnostic tools that help doctors make treatment decisions. It also sells data generated from its tests to pharmaceutical companies for drug development.
The company went public in June 2024, and Wood has been actively buying its stock since the IPO.
Tempus AI stock peaked at $104 in October and now trades around $50 per share, down more than 50% from its all-time high.
The company reported its latest earnings on February 24, but the market reaction was negative. Tempus AI shares fell about 7% the day after the earnings report.
Related: Bank of America has dire warning for stock investors
For the fourth quarter, Tempus AI reported a loss of 4 cents per share, less than the 5 cents loss expected by analysts. Revenue came in at $367.2 million, beating consensus estimates of $363.4 million and up 83% year-over-year.
However, the bulk of the revenue growth came from acquisitions, which boosted the company’s headline results.
“The strength of our unit’s growth in diagnostics coupled with the rapid growth of our data business is proof that we are unique in this space,” said Temps AI CEO Eric Lefkowski. Tempus AI CEO Eric Lefkowski said, adding that the company’s investment in AI “continues to build” and is expected to “drive significant growth over the next few years.”
JPMorgan analyst Casey Woodring lowered Tempus AI’s price target to $60 from $80 following the company’s Q4 results, while maintaining a neutral rating on the stock, Fly reported.
Woodring said the company’s “clouded outlook” on data upside and changing expectations for Embry, the acquired genetic testing unit, makes it difficult to see upside. The analyst suggests that investors may want to stay on the sidelines for now.
Wood says healthcare is the most underappreciated application of AI.
“We have 37 trillion cells in our body, and they will be sorted as we look for a cure,” Wood told CNBC last year.
“I think the most underappreciated application of AI is healthcare. I think healthcare is responsible for an incredible amount of storage out there right now. Data is the name of the game,” Wood said.
Related: Goldman Sachs predicts Brent crude prices for rest of 2026
This story was originally published by The Street on March 15, 2026, where it first appeared in the Investing section. Add TheStreet as a Favorite Source by clicking here.
