Cathie Wood just made her biggest single-stock bet of 2026. And she picked the one stock that Wall Street spent all of February downgrading.
ARK Invest poured over $50 million into $HOOD in the first two weeks of February — buying aggressively across ARKK, ARKW, and ARKF while the stock sat 31% below its highs. Five analysts cut their price targets on the same day Wood was writing checks.
Someone is very wrong here. Let's figure out who.
The buying spree
ARK's February HOOD accumulation wasn't a one-off. It was a campaign.
| Date | Amount | Shares | Fund(s) |
|---|---|---|---|
| Feb 2 | $21.7M | — | ARKK |
| Feb 3 | $5.2M | — | ARKK |
| Feb 11 | $23.8M | 433,806 | ARKK, ARKW, ARKF |
| Total | ~$50.7M | — | — |
The Feb 11 buy was ARK's single largest stock purchase of 2026. Not Tesla. Not Coinbase. Robinhood.
That's a bold call for a stock that just disappointed on revenue.
Why Wall Street is bailing
Robinhood's Q4 wasn't bad. Revenue hit $1.28 billion, up 27% year-over-year. Net income crossed $1.9 billion for the full year. By any normal standard, these are strong numbers.
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But "normal" stopped applying to HOOD a while ago. The stock had tripled off its 2024 lows heading into earnings, and the bar was sky-high.
The problems:
- Revenue missed — $1.28B vs. consensus expectations north of $1.3B
- Crypto revenue fell 38% — Bitcoin's sideways action killed the trading frenzy that powered Q3
- Capex guidance spooked investors — management signaled heavy spending ahead on new products
- Five analysts cut targets on Feb 12, with one arguing the EPS beat was an illusion from a low tax rate
The stock dropped 9% in a single session. It's now down 35% from its December peak.
Why Cathie Wood is buying
Wood's thesis on Robinhood hasn't changed. She sees a fintech platform in the early innings of becoming a full financial superapp — not just a trading app for crypto bros.
Here's what ARK is betting on:
The crypto cycle isn't over. Q4 crypto revenue dropped because Bitcoin went sideways, not because users left. When the next leg up comes, Robinhood's crypto revenue snaps back. ARK has been consistently right on crypto cycles, even when timing has been off.
Assets under custody keep climbing. Robinhood ended Q4 with $333 billion in AUC, a record. People are parking more money on the platform, not less. Revenue per user has room to expand as Robinhood rolls out wealth management, retirement accounts, and credit cards.
The selloff is driven by expectations, not fundamentals. Revenue grew 27%. The company is profitable. Free cash flow is positive. The stock is getting punished for not growing fast enough after a 300% run.
The bear case is real, though
Don't ignore what's actually concerning:
Robinhood's revenue mix is dangerously tilted toward crypto and options — both volatile, sentiment-driven businesses. When the music stops (and it always does), transaction revenue can fall off a cliff.
The capex ramp matters too. Management wants to build out new product lines, but that means margins could compress before new revenue streams materialize. Wall Street hates spending money on things that don't show up in next quarter's numbers.
And there's the valuation question. Even after a 35% drop, HOOD trades at roughly 25x forward earnings. That's not exactly a fire sale for a company whose fastest-growing revenue line just fell 38%.
The real question
This comes down to whether Robinhood is a trading app or a financial platform.
If it's a trading app, the bears are right. Crypto revenue is cyclical, options volume will normalize, and 25x earnings is too rich for what's essentially a souped-up brokerage.
If it's a financial platform — one that's capturing a generation's financial lives from checking accounts to retirement to crypto — then $333 billion in AUC is just the beginning, and Cathie Wood is buying the dip of the decade.
ARK's track record on these calls is mixed. Wood was early on Tesla and Bitcoin — famously, embarrassingly early at times — but ultimately right on both. She was wrong on Zoom, wrong on Teladoc, wrong on a dozen pandemic darlings that never recovered.
Bottom line
Cathie Wood is putting real money behind the idea that Robinhood's 35% pullback is noise, not signal. Wall Street disagrees. The next two quarters will settle this debate — if crypto revenue rebounds and new product lines start contributing, the bears will look foolish. If crypto stays flat and capex eats into margins, $50 million in February buying will look like catching a falling knife.
We lean toward Wood on this one. Record AUC, a profitable business, and a 35% haircut is a better setup than most Wall Street darlings can claim right now. But position size matters — this is a high-conviction, high-volatility bet, and it should be sized accordingly.
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