- Roku (NASDAQ:ROKU) stock now dominates the Ark Innovation ETF (NYSEMKT:ARKK)
- Tesla (NASDAQ:TSLA) is no longer the top holding in the flagship exchange-traded fund
- ARKK is down more than 55% year-to-date (YTD)
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Cathie Wood’s infamous brain child, the Ark Innovation ETF, recently crowned a new top holding: ROKU stock. As of Thursday, the ETF contained a $717 million stake in Roku, beating out the $702 million position in Tesla.
Tesla has dominated Ark’s portfolios for years now, so this change likely comes as a surprise to many investors. Over the past year, the fund has consistently gravitated toward ROKU while thinning its TSLA stake. This is especially surprising given that Tesla has historically been a big winner for Ark Invest, largely fueling Wood’s triumphant 2020.
According to Markets Insider, “Tesla has been Ark’s only winning position over the past year, delivering a 25% return.” Last month, Ark even updated its 2026 price target on Tesla, giving shares a potential $4,600 price tag. That represents 600% upside from the current $650 price.
Wood Opts for ROKU Stock Amidst Bear Market Warnings
This transition out of Tesla comes has Ark attempts to concentrate its holdings in growth stocks during the current market downturn. Wood has seemingly continued to buy high-growth tech stocks in the wake of the market collapse as part of Ark’s long-term strategy. This includes names like Sea Limited (NYSE:SE) and Roblox (NYSE:RBLX), both of which have slowly become staples for ARKK.
Earlier this year, Wood explained her fund’s strategy in an interview with ETF Trends.
“We’ve been concentrating our portfolios towards our highest conviction names […] The reason we concentrate our portfolios is because during risk-off periods most investors and analysts diversify their portfolios and get closer to their benchmarks, the benchmarks against which they’re measured. We do not have any one benchmark.”
Unfortunately for Wood, though, it may be a matter of too little too late. While the strategy is clearly targeting long-term growth, it’s hard to ignore its immediate failures. Ark Innovation is down a massive 55% YTD. The S&P 500 is down roughly 20% YTD.
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.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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