Ark Invest’s Cathie Wood thinks an under-the-radar investing opportunity in the artificial intelligence boom is health care, and one of her high-conviction bets is up nearly 10% in the new year already. “We’ve got 37 trillion cells in our body, and they’re going to be sequenced as we’re looking for cures,” Wood said Tuesday on CNBC’s ” Squawk Box .” “I think the most underappreciated application of AI is health care. I think health care is responsible for an incredible amount of storage out there right now. Data is the name of the game.” The innovation investor thinks health care could see the most profound AI application in the long term, whereas in the next five to 10 years, robotaxis might be the biggest application with the top enabler being her No.1 bet Tesla . Wood said she’s particularly bullish on Recursion Pharmaceuticals , which she said has seen a tenfold increase in the average number of hypotheses per researcher thanks to AI. Wood owns almost 19 million shares of Recursion in her flagship Ark Innovation ETF (ARKK) , worth roughly $140 million. In October, Recursion received approval from the Food and Drug Administration to begin phase 1 trials of an AI-discovered cancer treatment. The company said it was able to use its AI-enabled drug discovery platform to identify an area of biology to target for the treatment of solid tumors and lymphoma, match it with a drug candidate and move all the way to gaining regulatory approval to begin studies in less than 18 months. Recursion shares have gained more than 9% in 2025 after a 31% sell-off last year. Other health-care stocks in ARKK include Crispr Therapeutics , Tempus AI , Twist Bioscience and Beam Therapeutics. Palantir bull Overall in the AI investing story, Wood said she’s moving away from hardware and infrastructure and doubling down on software. One of her top picks in the software space is Palantir, which just reported stronger-than-expected results. “Palantir is a very expensive stock, but there’s nothing like it in the software space,” Wood said. “It is, we believe, going to dominate the biggest part of the tech stack when it comes to AI. And that’s the platform as a service part of the stack.” Shares of Palantir surged 24% to a record high on Tuesday after the firm reported stronger-than-expected fourth-quarter results and guidance driven by AI. Co-founder and CEO Alex Karp called the momentum within its commercial and government segments “unlike anything that has come before.”
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