Cathie Wood buys $8.7 million of beaten-down AI stock

Cathie Wood, CEO of Ark Investment Management, is known for buying her favorite growth stocks during sharp pullbacks.

That’s exactly what she’s doing with Tempus AI (TEM) after the healthcare technology stock tumbled 14% over the past week.

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 4.87% as of July 23, while the S&P 500 surged 8.26%, 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 22, her Ark Innovation ETF has delivered a five-year annualized return of -8.83%, while the S&P 500 has an annualized return of 11.42% over the same period, according to data from Morningstar.

Over the past 12 months through July 17, the Ark Innovation ETF saw roughly $1.42 billion in net outflows.

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Cathie Wood flags “the deflationary impact” of tech innovation

Wood 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.

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.”

But not all investors agree with Wood’s optimism. Over the past 12 months through July 17, the Ark Innovation ETF saw roughly $1.42 billion in net outflows, according to data from ETF research firm VettaFi.

Cathie Wood buys $8.7 million of Tempus AI stock

On July 20, Wood’s Ark funds bought 188,785 shares of Tempus AI, Inc. (TEM), according to Ark’s daily trade information. Based on the latest trading price of $45.95, the shares are valued at about $8.7 million.

Tempus AI is a healthcare tech company that provides AI-driven diagnostic tools that help doctors make treatment decisions. It also sells the data generated from its tests to pharmaceutical companies for drug development.

Tempus AI was once a Wall Street darling, drawing attention from high-profile investors including former House Speaker Nancy Pelosi. After soaring to a record high of $104.32 in October 2025, the stock has since tumbled nearly 56% from that level.

Over the past five trading days, shares of Tempus AI are down roughly 14% , bringing its year-to-date loss to 22%, according to Yahoo Finance data.

This week’s drop occurred after Tempus AI announced acquisition of Personalis for $1.5 billion, a deal that sent both stocks sinking.

The healthcare technology company said Monday it will acquire all outstanding Personalis shares for $16.25 per share, a 5.6% premium to Friday’s closing price. The deal will be paid primarily in Tempus stock, although up to 50% of the consideration could be paid in cash.

Tempus AI already owns about 20% of Personalis after investing in the company in 2023.

The deal will expand Tempus AI’s capabilities in minimal residual disease (MRD) testing, which helps detect lingering cancer after treatment.

“MRD is a large and rapidly growing market with the potential to truly transform how cancer patients are monitored, helping clinicians make faster and more informed decisions when cancer recurs,” Tempus AI’s chief executive Eric Lefkofsky said in a statement. “We have already demonstrated the strength of combining highly sensitive MRD technology with our commercial infrastructure.”

The stock decline after the news was mostly due to the acquisition’s stock-based structure, some analysts said, as Barron’s reported. Needham has downgraded Personalis to Hold from Buy following the acquisition announcement.

Meanwhile, Morgan Stanley said the acquisition “makes sense,” despite the current financials being “somewhat harder to digest,” according to The Fly.

Morgan Stanley said the acquisition strengthens Tempus AI’s position in precision oncology by adding Personalis’ NeXT Personal MRD test to its portfolio. The firm also expects a smooth integration, noting the companies have worked together for years and about 80% of Personalis’ clinical testing volume already comes through Tempus AI’s sales channels.

Tempus AI went public in June 2024, and Wood had actively bought its stock since the IPO.

On May 5, Tempus AI reported first-quarter results that topped Wall Street expectations and slightly raised its full-year revenue outlook.

The company posted adjusted earnings of 13 cents per share, better than analysts’ expectations for a 20-cent loss, while revenue rose to $348.1 million from estimates of $345.4 million. Tempus also raised its fiscal 2026 revenue guidance to a range of $1.59 billion to $1.6 billion and maintained its adjusted EBITDA forecast of about $65 million.

Tempus AI is to report its second-quarter earnings on July 30.

Wood has been bullish on the healthcare sector, saying it is “the most profound application of AI” in a March interview with Bloomberg.

“It includes the convergence of sequencing technologies, AI, and gene editing… We have 35 to 40 trillion cells in our body generating data, and AI is a data project,” she said.

Tempus AI is now the second largest holding in the Ark Innovation ETF.

Top 10 Holdings in the Ark Innovation ETF by Portfolio Weight as of July 23, 2026:

Tesla (TSLA) – 10.03%
Tempus AI (TEM) – 4.89%
CRISPR Therapeutics (CRSP) – 4.47%
Coinbase (COIN) – 4.43%
SpaceX (SPCX) – 4.41%
Robinhood (HOOD) – 4.36%
Advanced Micro Devices (AMD) – 4.32%
Shopify (SHOP) – 4.32%
Circle Internet Group (CRCL) – 3.67%
10x Genomics (TXG) – 3.35%

Other than selling Tempus AI shares, Wood’s latest trades included buying Meta Platforms (meta), SpaceX (SPCX), Archer Aviation (ACHR), Pony AI (PONY), and WeRide (WRD). She also trimmed positions in Robinhood Markets (HOOD), Brera Holdings (SLMT), Strata Critical Medical (SRTA), and Iridium Communications (IRDM).