Cathie Wood buys $10.7 million of sinking AI stock

Group 1: Investment Strategy and Performance - Cathie Wood, head of Ark Investment Management, focuses on "disruptive" tech companies and actively manages her positions, often buying shares during price declines and trimming them during price increases [1] - The Ark Innovation ETF delivered a remarkable 153% return in 2020 and gained 35.49% in the previous year, significantly outperforming the S&P 500's return of 17.88% during the same period [1] - However, the Ark Innovation ETF experienced a decline of over 60% in 2022, leading to a five-year annualized return of -10.98%, compared to the S&P 500's annualized return of 13.94% [2] Group 2: Fund Flows and Market Sentiment - In the 12 months through January 21, the Ark Innovation ETF faced approximately $1.18 billion in net outflows, indicating a lack of confidence among investors [3][7] - Despite the outflows, Wood maintains a positive outlook on emerging high-tech companies, viewing them as potential drivers of significant change and long-term growth [3] Group 3: Wealth Impact and Future Outlook - From 2014 to 2024, the Ark Innovation ETF has resulted in a loss of $7 billion in investor wealth, ranking as the third-biggest wealth destroyer among mutual funds and ETFs [4] - In a recent outlook letter, Wood expressed optimism about the U.S. economy, suggesting it is poised for a sharp rebound, describing it as a "coiled spring" ready to bounce back [5] - Wood also dismissed concerns about an "AI bubble," asserting that a major capital spending cycle is on the horizon, driven by advancements in AI, robotics, and other technologies [6] Group 4: Recent Stock Purchases - On January 20, Ark Innovation ETF purchased 32,408 shares of Broadcom Inc. (AVGO) for approximately $10.7 million, following earlier purchases of 31,573 shares on January 8 and 143,089 shares on January 14 [8]