Cathie Wood’s ARK Invest rotated within the artificial intelligence sector during Wednesday’s sharp sell-off, adding to CoreWeave after its stock plunged 15.46% to $65.78 and trimming a portion of its Palantir Technologies position.
ARK purchased 188,665 CoreWeave shares worth approximately $12.4 million, while selling 31,432 Palantir shares valued at roughly $6.3 million. The Palantir sale was described as a trim rather than an exit, with ARK retaining exposure to the software company after a gain of more than 60% since August.
CoreWeave’s decline was not an ordinary pullback. The company has built its growth story around AI compute demand, but its expansion has relied heavily on debt and lease financing. It reported roughly $48 billion of debt and about $52 billion in combined debt and lease obligations at the end of June, with second-quarter net interest expense of $640 million. Yields on some unsecured bonds recently approached 15%, which Bernstein analyst Madison Rezaei said are levels 'typically associated with distress'.
The bull case remains tied to CoreWeave’s $104 billion revenue backlog and management’s statement that nearly all 2027 capacity is sold. However, D.A. Davidson analyst Gil Luria offered a sharp downside warning on the Prof G Markets podcast, saying: ‘The equity value is going to be zero’ if the AI investment cycle weakens. Luria said CoreWeave is borrowing at about 9% while earning roughly 1% on its investments, meaning expensive capital could erode future growth economics.
Palantir presents a different risk. The stock closed at $200.97 on Wednesday and trades at roughly 129 times forward non-GAAP earnings, leaving little room for disappointment despite accelerating revenue growth and a recent Goldman Sachs upgrade to Buy with a $230 price target. ARK’s sale therefore looks like valuation-inspired profit-taking rather than a negative reassessment of Palantir’s execution.
Additional ARK disclosures showed purchases of Meta and Cerebras shares across several funds on the same day. While this news concerns listed AI equities rather than digital assets, it highlights shifting risk appetite within high-growth technology markets.
