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Move over Tesla, ROKU Stock is the new #1 holding in Cathie Wood’s ARK Invest


  • Roku (NASDAQ:ROKU) stock now dominates the Ark Innovation ETF (NYSEMKT:ARKK)
  • You’re here (NASDAQ:TSLA) is no longer the primary holding of the flagship exchange-traded fund
  • ARKK is down more than 55% since the start of the year (YTD)

Source: jejim / Shutterstock.com

Cathie Wood’s infamous mastermind, ETF Ark Innovation, recently crowned a new top-tier stock: ROKU stock. On Thursday, the ETF held a $717 million stake in Roku, beating the $702 million position in Tesla.

Tesla has dominated Ark’s portfolios for years now, so this change will likely surprise many investors. Over the past year, the fund has consistently shifted its focus to ROKU while reducing its stake in TSLA. This is particularly surprising given that Tesla has always been a big winner for Ark Investlargely fueling Wood’s 2020 triumph.

According to Initiated in the markets, “Tesla has been Ark’s only winning position over the past year, returning 25%.” Last month, Ark even updated its 2026 price target on Tesla, giving the stock a potential price of $4,600. That’s a 600% upside from the current price of $650.

Wood opts for ROKU stocks amid bear market warnings

This transition out of Tesla comes from Ark’s attempts to focus its holdings in growth stocks during the current market downturn. Wood apparently continued to buy high-growth tech stocks following the market crash as part of Ark’s long-term strategy. This includes names like Sea Limited (NYSE:SE) and Roblox (NYSE:RBLX), both of which have become staples for ARKK.

Earlier this year, Wood explained his fund’s strategy in an interview with ETF Trends.

“We have focused our portfolios on our most compelling stocks […] The reason we focus our portfolios is that during periods of risk aversion, most investors and analysts diversify their portfolios and move closer to their benchmarks, the benchmarks against which they are measured. We do not have a single reference. »

Unfortunately for Wood, it may be too little too late. While the strategy is clearly aimed at long-term growth, it’s hard to ignore its immediate failures. Ark Innovation is down a massive 55% since the start of the year. the S&P500 is down about 20% since the beginning of the year.

Meanwhile, ROKU stock is slowly approaching a 52-week low, continuing to decline from July 2021 highs. Whether the streaming platform can launch ARKK into the green remains to be seen.

As of the date of publication, Shrey Dua did not hold (either directly or indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com publishing guidelines.

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