Cathie Wood ranks among the biggest cheerleaders for Tesla (TSLA -1.11%) you'll find. She predicted earlier this year that the electric vehicle (EV) stock could hit $2,000 per share by 2027. That's roughly 6.4 times Tesla's current price.

It might be surprising, therefore, that Wood isn't buying more Tesla shares. Instead, her Ark Invest exchange-traded funds (ETFs) sold off around $21 million of the stock only hours before Tesla reported its second-quarter earnings and the subsequent dip in its share price.

Now, though, Wood is scooping up shares of another magnificent growth stock. Let's see why.

Trading out Tesla

Tesla announced its Q2 results after the market close on Wednesday, July 19. In the two days before the earnings update, a couple of Wood's ARK ETFs reduced their stakes in the EV maker.

Her flagship Ark Innovation ETF (NYSEMKT: ARKK) sold 38,329 Tesla shares on Monday and 24,189 shares on Tuesday. These transactions were worth close to $18 million. Ark Next Generation Internet ETF (NYSEMKT: ARKW) also sold 6,855 Tesla shares on Monday and 4,470 shares on Tuesday. The two sales generated around $3 million. In total, Wood's ETFs sold around $21 million of Tesla stock in the 72-hour period before the company's Q2 update.

But Wood found another stock to pour money into now. On the same days her ETFs were selling Tesla, they were buying shares of Twilio (TWLO 1.47%). ARKK scooped up more than $18 million of the technology company, while ARKW bought around $3 million worth of Twilio shares. In addition, the Ark Fintech Innovation ETF purchased roughly $2 million of the stock. 

What's behind the latest moves?

Wood has by no means given up on Tesla. Even with the recent sales, the EV stock remains the top holding for ARKK and Ark Autonomous Technology & Robotics ETF, as well as the fifth-largest position for ARKW. 

Although she didn't reveal the reason behind the Tesla sales, it's likely that Wood simply needed to rebalance the portfolios in her ETFs somewhat. Tesla's huge year-to-date gain probably made its weight in the ETFs a little higher than Wood preferred.

We can make a pretty good guess why Wood invested a significant chunk of money in Twilio, too. Activist investor Legion Partners is pushing Twilio to make changes that benefit shareholders. The company has already restructured to boost its bottom line.

Even though Twilio's shares have jumped more than 30% so far this year, the stock is still 85% below its peak in early 2021. Wood seems to believe that Twilio will get its groove back. She's not alone in that view. Of the 13 analysts surveyed in July by Refinitiv, 10 rate Twilio as either a buy or a strong buy.

More magnificent than Tesla?

Wood wouldn't be investing so heavily in Twilio if she didn't think it was a magnificent growth stock. But does she believe it's more magnificent than Tesla? I doubt it.

Sure, Tesla commands a significantly higher valuation than Twilio. However, my view is that Wood sees this premium as appropriate. After all, if Tesla grows as much as she thinks it will, the current share price will look cheap in retrospect.

Still, I wouldn't be surprised to see the Ark Invest ETFs buy even more shares of Twilio in the coming weeks and months. Wood's favorite might be Tesla, but it doesn't mean she can't really like other stocks too.