Cathie Wood's ARK Sells Alibaba, Buys Cerebras Systems

On June 26, 2026, ARK Invest's flagship funds executed notable portfolio changes, selling shares of e-commerce giant Alibaba Group and streaming hardware company Roku while establishing a new position in AI chip developer Cerebras Systems. The sale of Alibaba occurred as the stock traded near $95.07, down 7.34% on the day, firmly within its $94.72 to $98.08 range. This move by one of the most closely watched active managers in disruptive technology signals a continued realignment away from certain legacy internet platforms toward foundational companies in artificial intelligence.

Context — why this matters now

The transaction reflects a persistent strategic pivot by Cathie Wood's firm. The last significant ARK sale of a major Chinese equity position occurred in late 2024, when the firm trimmed its holdings in JD.com and Pinduoduo amid escalating US-China tech tensions. The current macro backdrop features elevated Treasury yields pressuring growth equity valuations and persistent regulatory uncertainty surrounding Chinese firms listed on US exchanges. What changed to trigger the sale now is likely a combination of Alibaba's prolonged underperformance relative to US tech peers and a decisive reallocation of capital toward what ARK perceives as higher-conviction, pure-play AI opportunities like Cerebras, whose wafer-scale engine architecture represents a direct bet on the next generation of compute.

The move away from Roku continues a theme of ARK reducing exposure to consumer-facing, advertising-dependent technology in favor of enterprise infrastructure. This is consistent with the firm's publicly stated investment thesis that the artificial intelligence software and hardware stack will drive the next wave of explosive growth, eclipsing the previous cycles led by internet platforms and mobile. The decision to sell into weakness in Alibaba—a stock down over 60% from its 2020 highs—suggests a final capitulation on a deep-value turnaround story, freeing up capital for what the manager views as exponential growth narratives.

Data — what the numbers show

The specific positioning details reveal the scale and focus of the shift. Alibaba's closing price of $95.07 represents a decline of 7.34% on the day of the trade, a move that significantly underperformed the broader technology sector. The stock's intraday range was narrow, from $94.72 to $98.08, indicating concentrated selling pressure without a corresponding bid. This price action extends a long-term downtrend for the Chinese equity benchmark, the Hang Seng Tech Index, which is down approximately 15% year-to-date versus the Nasdaq Composite's gain of over 8%.

Metric	Alibaba (BABA)	Nasdaq 100 (QQQ)
Daily Change	-7.34%	-0.5% (approx)
Key Intraday Level	$94.72 (low)	Not Applicable
Relative Performance	Severe Underperformance	Benchmark

ARK's purchase of Cerebras Systems represents a new position, with the size likely constituting a standard initial allocation of between 0.5% and 1.5% of the relevant ARK fund's portfolio. The firm has steadily increased its aggregate exposure to semiconductor and AI infrastructure companies, with such holdings now representing over 25% of its flagship ARK Innovation ETF's assets, up from roughly 15% two years prior.

Analysis — what it means for markets / sectors / tickers

The immediate second-order effect is incremental selling pressure on Chinese American Depositary Receipts (ADRs) as other active managers reassess their own holdings following a high-profile exit. Stocks like JD.com, Pinduoduo, and Baidu could see mild underperformance in the near term. Conversely, the flow into Cerebras provides validation for other private AI hardware companies approaching the public markets, potentially benefiting the valuation outlook for peers like SambaNova Systems and Groq.

A key limitation of interpreting this single trade is that ARK's funds are not market-cap-weighted portfolios; their high-conviction, concentrated bets are designed to diverge significantly from benchmarks. Therefore, while indicative of the manager's view, it does not necessarily forecast a sector-wide rotation. The counter-argument is that Alibaba's current valuation—trading at a forward price-to-earnings ratio near 8x—already prices in immense pessimism, making this a potential contrarian buying opportunity rather than a signal to sell.

Positioning data shows systematic quant funds have been reducing exposure to China for months, while long-only fundamental managers are split. The flow from this specific trade is relatively small in dollar terms but symbolically large, moving capital from a value-oriented, cash-generative internet platform to a speculative, pre-profitability AI hardware developer. This underscores the ongoing battle for capital between deep-value tech and high-growth, high-burn-rate innovation.

Outlook — what to watch next

Investors should monitor two specific catalysts for Chinese equities: the next round of US-China trade talks scheduled for late July 2026 and Alibaba's own quarterly earnings report, expected in early August. For the AI hardware sector, key milestones include Cerebras's next funding round or S-1 filing date, which will provide fresh financial metrics, and the release of benchmark performance data for its next-generation wafer-scale chip.

Critical levels to watch for Alibaba are psychological support at $90 and its 2025 low of $85.21. A break below $85 would signal a complete breakdown of long-term holder support. For the AI theme, watch the performance of the iShares Semiconductor ETF (SOXX) relative to the S&P 500; sustained outperformance would confirm capital is prioritizing the sector ARK is betting on. No prediction is made, but further restrictive policies from either the Chinese or US governments would likely accelerate the divergence in performance between these two asset categories.

Frequently Asked Questions

What does ARK selling Alibaba mean for retail investors?

For retail investors, this trade highlights the importance of understanding a fund manager's core thesis before following individual moves. ARK Invest's strategy is explicitly focused on disruptive innovation with the potential for exponential growth. Selling Alibaba, a mature company in a contested regulatory environment, reinforces that thesis. Retail investors should evaluate whether their own portfolio's risk profile and time horizon align with such a high-conviction, thematic approach, rather than mimicking the trade directly.

How does Cerebras Systems differ from Nvidia in AI chips?

Cerebras Systems employs a fundamentally different architecture from Nvidia's GPU-centric model. Its Wafer Scale Engine is the largest chip ever built, containing up to 2.6 trillion transistors on a single piece of silicon, compared to Nvidia's H100 with 80 billion transistors. This design aims to drastically reduce the time and communication latency for training massive AI models by keeping more computations on a single chip. While Nvidia dominates today's market with a proven software ecosystem (CUDA), Cerebras represents a bet on a paradigm shift in scaling efficiency for next-generation large language models.