Which AI Stocks Did Cathie Wood Buy in Q4?

Introduction

Cathie Wood’s ARK Innovation ETF [ARKK] has had a rocky couple of months. 

Down 3.65% in the year to date through March 5’s close, it is up just 7.93% in the previous 12 months.

While these are not catastrophic numbers, they are a far cry from the heady heights of 2019, 2020 and 2023, which saw annual returns of 35.58%, 152.82% and 67.64%, respectively.

These are the figures that — alongside Wood’s innovation-focused approach — made the fund famous, and investors will likely be looking for a return to these levels in 2025. What does its recent 13F suggest about the likelihood of such a return?

The Big Picture for Q4 2024

Wood’s portfolio saw some shifts in Q4 2024. Before looking at the biggest buys and biggest sells, investors might want to consider the ARK Innovation ETF’s overall performance for the final three months of 2024.

The fund’s total holdings increased slightly from the circa $11bn at which it had sat for the middle two quarters of the year, to just over $12bn. While still notably down on ARKK’s 2023 13F values, of which the lowest was $13.07bn in Q3, things do nonetheless seem to be heading in the right direction.

ARKK’s Trump bump, which saw the fund’s value surge more than 30% in the final months of 2024, failed to keep investors interested. With outflows topping $3bn in 2024, can the fund regain its spot as the golden ETF this year?

The Major Buys for ARKK in 2024

Q4 2024 saw some notable shifts in ARKK’s holdings. Here are some of the most drastic – and interesting – shifts in the quarter.

Gitlab Increases 345%

GitLab [GTLB] is an artificial intelligence-powered (AI) software development management platform, boasting Boeing [BA] and the London Stock Exchange Group among its major clients.

In line with Wood’s long-term confidence in AI technology, ARKK bought 899,823 shares of GTLB in Q4 2024, representing a 345% increase on Q3’s holding.

Biggest Newcomer: Illumina

ARKK purchased a heathy 686,330 Illumina [ILMN] shares in the fourth quarter, representing a new holding for the fund. 

As Illumina develops DNA sequencing and genome-based technologies, this move confirms Wood’s ongoing interest in the med-tech sector.

With ILMN shares down 36.03% for the 12 months to March 5’s close, and 35.88% year-to-date, Wood seems to be banking on a move back to the stock’s 2021 highs, which would translate to an almost 500% rise on ILMN’s current trading value.

Some Big Names See a Boost

Less drastically, but still interesting from a strategic point of view, Adobe [ADBE] and Apple [APPL] saw 220% and 194% uplifts, representing 332 and 920 new shares purchased, respectively.

Wood’s apparent endorsement of established, giant names in the Innovation ETF might suggest a move towards more traditional tech stocks as an insurance policy against the riskier newcomers at such a turbulent time for investing more generally.

An Honorable Mention for Palantir

Palantir [PLTR], which was ARKK’s 7^th largest holding in Q3 2024, has overtaken Robinhood [HOOD], Block [XYZ] and Roblox [RBLX] to fourth place.

This is despite Wood offloading 29% of the fund’s shares in PLTR in the fourth quarter.

The Sells of the Quarter

As was to be expected, Q4 saw some major selloffs for the fund, with three stocks dropping by more than 5 million shares.

What might these sales reveal about Cathie Wood’s priorities going forward?

The -5,000,000 Club

Standard BioTools [LAB], Unity Software [U] and Robinhood all saw their stakes axed by more than 5 million shares, representing 63%, 83% and 28% drops, respectively.

With LAB’s price failing to claw its way back to April 2024 highs, despite some choppy rallies throughout the year, the firm’s revenue concerns have seen Wall Street experts cutting their predictions. Wood’s interest in medical technology has been directed towards more revenue-positive outlets, such as Illumina.

The drop in Unity, a software platform used to create games and simulations in both 2D and 3D, reflects a larger caution around gaming stocks, as evidenced by Roblox’s slip from fourth to fifth position in the fund. It is possible this pullback comes as the world continues to move into post-pandemic life, spending less time gaming.

Moderna and Compugen Axed

Among the 13 stocks that have had their holdings cut to zero or near-zero in Q4, Moderna [MRNA] and Compugen [CGEN] stand out as notable moves — not least because ARKK previously held over a million shares of each.

The move away from Moderna chimes with the realignment Wood seems to have implemented in the fund’s medical stocks. MRNA shone during the Covid-19 pandemic, becoming one of the first companies to offer a viable vaccine for the disease. Other than a couple of short-lived peaks in May 2024 and December 2022, the stock has been steadily declining since 2021. In combination with the Roblox reduction, this may suggest Wood is moving past pandemic-era darlings.

Compugen, a clinical-stage predictive drug discovery and development company headquartered in Israel, also falls within this medical realignment. 

It seems Wood is moving away from drug-focused stocks to focus on technology companies underpinning the healthcare sector.

Given the macroeconomic healthcare climate, particularly in the US, this strategy may well prove to be a timely one.

Conclusion

Cathie Wood’s ARKK fund has faced waning interest in some quarters over the past couple of years. Will these Q4 2024 moves be enough to bring the fund back into the spotlight?