Cathie Wood Accumulates DraftKings Amid Prediction Market Pushback
ARK Invest sees opportunity in DKNG despite headwinds in prediction markets
Cathie Wood’s ARK Invest made a bold move today by acquiring 511,049 shares of DraftKings Inc. (ticker: DKNG, Nasdaq), investing approximately $19.11 million into a company that has recently been under pressure from emerging prediction markets. This decision comes as sector sentiment wavers, yet ARK clearly sees potential upside in the gambling / sports betting sector.
DraftKings (sector: Gambling / Consumer Cyclical) has been scraping support this week after concerns about competition from platforms like Kalshi caused a sharp dip in its stock. In fact, DKNG fell nearly 17% earlier in the week, while Flutter (its rival) dropped around 10%. Yet today, Wood moved in decisively, distributing the new shares across three of her ETFs: ARKK, ARKW, and ARKF.
The timing is especially interesting: many analysts downgraded or tempered expectations for DraftKings in the face of prediction market threats. Northland downgraded DKNG to “underperform”, citing that the new entrants might eat into DraftKings’ margins. Others, like Oppenheimer, cut their targets but maintained an “outperform” view, suggesting that the threat is overstated. Meanwhile, BMO Capital flagged the selloff as a possible buying opportunity, and Needham remains bullish about the company’s strength in regulated markets.
This isn’t ARK’s first bet on DraftKings. Over time, Wood’s funds have tinkered with their stakes in DKNG amid waves of volatility and shifting narratives. But this purchase is among the most aggressive ones, showing conviction in the face of market fear. Some sources suggest that DraftKings now constitutes around 1–1.3% of ARK’s total equity portfolio, making it a notable position.
Financially, DraftKings reports a mixed but promising picture. In its recent quarter, DKNG posted revenue growth of 37% to $1.51 billion and achieved $0.30 EPS, topping expectations. However, the company’s stock has been volatile: it recently fell out of its “buy zone” following earnings, and while the fundamentals remain intriguing, investor sentiment has been battered by competitive noise.
Morgan Stanley has thrown a lifeline in this turbulence, recommending that investors “buy the weakness” in both DraftKings and Flutter, calling the reaction to the prediction markets overblown. They believe DraftKings’ broad offerings and regulated footprint will defend it against disruption. Others caution that the legal uncertainty around prediction markets could turn into regulatory risk.
What does all this mean for DKNG and ARK’s portfolio? For one, Cathie Wood is making a statement: she’s doubling down in a beaten-down name with long-term optionality. If DraftKings weathers the storm — by defending its core business or adapting – ARK could reap gains. But if prediction markets expand unchallenged, the stock could face more downside pressure.
Either way, today’s trade is a signal to markets: ARK sees value where others see risk. DKNG is now one to watch closely — not just for performance, but for whether this bet pays off in a rapidly shifting landscape of sports betting, prediction platforms, and regulation.