Cathie Wood's Ark Innovation ETF Surges on AI Bets, Led by Tesla and Roblox
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Cathie Wood's Ark Innovation ETF (ARKK -1. 89%) has been one of the best performing ETFs in the market recently. In less than three months since the April lows, the...
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July 1, 2025
06:47 AM
The Motley Fool
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Cathie Wood's Ark Innovation ETF (ARKK -1. 89%) has been one of the best performing ETFs in the market recently
In less than three months since the April lows, the ETF has gained more than 75%
Of course, the entire stock market has rebounded during that period
In fact, the S&P 500 hit a fresh all-time high on the day this was written
But the Ark Innovation ETF has outperformed all of the major stock indices recently
Let's look at what is driving the performance, and whether this AI-focused ETF could be a smart buy right now
Image source: Getty Images
Here's why Ark Innovation ETF has soared recently In a nutshell, the Ark Innovation ETF invests in a portfolio of mostly AI-focused stocks that have mostly performed quite well lately
Earlier in 2025, there was widespread fear that AI investment would slow down, that tariffs would hurt any AI stocks with international, and that the U
Economy was potentially heading for a recession
Now, there is far less uncertainty and a generally brighter economic outlook
And it is certainly reflected in the performance of the Ark Innovation ETF's top holdings: Company (Symbol) % of Ark Innovation ETF Assets 1-Year Gain Tesla (TSLA -4. 61%) 13% 66% Coinbase (COIN -4. 7% 63% Roblox (RBLX -4. 3% 185% Roku (ROKU -0. 8% 52% Palantir (PLTR -4. 5% 471% Tempus AI (TEM -7. 2% 147% Robinhood (HOOD -1. 1% 272% Shopify (SHOP -2. 26%) 5% 75% Data sources: Ark Invest, YCharts
Performance as of 6/27/2025
To call this an impressive level of performance would be an understatement
The worst performing stock out of Ark Innovation ETF's eight largest holdings is up by 52% over the past year
Four out of the eight have duced triple-digit returns in just a year
S of the ETF are up by 60% over the past year, and the performance of its top holdings has certainly been the driving force
Is the Ark Innovation ETF still a buy
To be sure, the Ark Innovation ETF's performance has been spectacular
But that doesn't necessarily mean s of the ETF are expensive, if the gains are well deserved
Just to name a few things, Coinbase is benefiting from renewed interest in cryptocurrencies and a generally regulatory-friendly environment
Palantir's AI innovations have made it one of the biggest success stories in the artificial-intelligence revolution
And Shopify has generally done an excellent job of executing on its growth strategy
It's also been a big winner of lower tariff uncertainty
The bottom line is that the Ark Innovation ETF isn't a cheap investment by any definition
Most of the stocks in the portfolio trade for rather high price-to-earnings and price-to-sales ratios
But it isn't necessarily an expensive one, and the revenue growth of most of its top holdings justifies the performance and premium valuations we're seeing
If you're looking to add AI exposure to your portfolio but don't want to pick individual stocks yourself, the Ark Innovation ETF remains a solid option
Matt Frankel has positions in Roblox and Shopify and has the ing options: short January 2026 $135 calls on Shopify
The Motley Fool has positions in and recommends Palantir nologies, Roblox, Roku, Shopify, and Tesla
The Motley Fool recommends Coinbase Global
The Motley Fool has a disclosure policy.
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