<div id="readability-page-1">Cathie Wood's Ark Innovation ETF (ARKK 0.64%) 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&amp;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. <div><img src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84MjMxODQvdXNpbmctbGFwdG9wLWluLWRhdGEtY2VudGVyLTIwMjQuanBnJnc9NzAw?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="700" height="476" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84MjMxODQvdXNpbmctbGFwdG9wLWluLWRhdGEtY2VudGVyLTIwMjQuanBnJnc9NzAw"/>Image source: Getty Images. </div> <h2>Here's why Ark Innovation ETF has soared recently</h2> 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 business, and that the U.S. 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: <div><table> <thead> <tr> <th> Company (Symbol) </th> <th> % of Ark Innovation ETF Assets </th> <th> 1-Year Gain </th> </tr> </thead> <tbody> <tr> <td> Tesla (TSLA -1.71%) </td> <td> 13% </td> <td> 66% </td> </tr> <tr> <td> Coinbase (COIN -0.80%) </td> <td> 8.7% </td> <td> 63% </td> </tr> <tr> <td> Roblox (RBLX -0.46%) </td> <td> 8.3% </td> <td> 185% </td> </tr> <tr> <td> Roku (ROKU 1.30%) </td> <td> 7.8% </td> <td> 52% </td> </tr> <tr> <td> Palantir (PLTR 4.38%) </td> <td> 5.5% </td> <td> 471% </td> </tr> <tr> <td> Tempus AI (TEM -4.48%) </td> <td> 5.2% </td> <td> 147% </td> </tr> <tr> <td> Robinhood Markets (HOOD 12.80%) </td> <td> 5.1% </td> <td> 272% </td> </tr> <tr> <td> Shopify (SHOP 1.60%) </td> <td> 5% </td> <td> 75% </td> </tr> </tbody> </table></div> 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 produced triple-digit returns in just a year. Shares of the ETF are up by 60% over the past year, and the performance of its top holdings has certainly been the driving force. <h2>Is the Ark Innovation ETF still a buy?</h2> To be sure, the Ark Innovation ETF's performance has been spectacular. But that doesn't necessarily mean shares 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. </div>

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Cathie Wood's Ark Innovation ETF has surged over 75% in less than three months, outperforming major stock indices. The ETF focuses on AI stocks, with top holdings like Tesla, Coinbase, and Roblox showing significant gains. Despite concerns earlier in 2025 about AI investments and economic conditions, a brighter outlook has driven performance. While the ETF's stocks have high valuations, their revenue growth supports these prices, making it a solid option for investors seeking AI exposure without picking individual stocks.

- Cathie Wood's Ark Innovation ETF has gained over 75% in less than three months, outperforming major stock indices amid a broader market rebound.  
- The ETF's strong performance is driven by its focus on AI stocks, with significant gains from top holdings like Palantir and Roblox, reflecting a brighter economic outlook.  
- While the ETF is not considered cheap, the revenue growth of its holdings justifies its premium valuations, making it a viable option for investors seeking AI exposure.

Cathie Wood's Ark Innovation ETF Surges on AI Bets, Led by Tesla and Roblox