Cathie Wood has been under fire since the initial underwhelming returns she made for her fund holders in 2020. The Ark Invest co-founder, CEO and investor has lost badly to the market in two of the last three years, and is set to struggle again in 2024.
But that doesn’t mean it’s standing still. Ark Invest was particularly busy adding to some existing positions last week. Wood was a buyer Palantir (NYSE: PLTR), UIPath (NYSE: PATH)And PagerDuty (NYSE:PD) last week. Let’s take a closer look.
1. Palantir
Most of Wood’s Ark Invest funds are trading at double-digit percentage declines this year, but not all of her largest holdings have fallen. One of her 10 largest combined holdings, Palantir, is up 26% so far in 2024.
Palantir is a company that provides software solutions for the intelligence community, based on artificial intelligence (Hey), data science and machine learning can transform big data into actionable propositions. After three years of declining revenue growth, top-line profits have picked up pace for three consecutive quarters.
The market was not happy With Palantir’s first-quarter results last month, shares tumbled. The stock is outperforming the market this year, but it was trading more than 60% higher so far this year than it was at its spring peak.
Investors weren’t happy with the guidance it provided, but there are far worse things than the 22% revenue growth that the midpoint of its outlook suggests. This would still be Palantir’s fourth straight period of accelerating year-over-year growth. But Palantir thinks top-line gains will slow in the latter half of 2024.
For now, Palantir is wooing investors as an AI play. It’s also making progress diversifying from its stronghold as a government contractor. Its state commercial revenue grew 40% in its latest quarter, roughly twice as fast as the rest of its business.
2. UiPath
The good news is that Wood was a buyer of UiPath on Thursday, as the stock dropped 34% following a poor financial update. It was the biggest purchase for Ark Invest’s five exchange-traded funds, so she was definitely buying the dip.
The bad news is that Wood was also a buyer of the robotics and automation software specialist on Tuesday, a day before UiPath released its first-quarter numbers. In essence, Wood bought the ditch before buying the dip. The stock has lost more than half of its value since the start of the year.
UiPath announced a 16% rise in revenue for the fiscal first quarter after the market closed on Wednesday, which was actually just ahead of analysts’ estimates. Bad news overshadowed the modest gain. UiPath lowered its full-year guidance. It also announced that its CEO is stepping down, which is rarely a good sign for a growing business.
3. PagerDuty
UiPath isn’t the only stock Wood invested in last week that’s fallen sharply this year. PagerDuty stock hasn’t fared as badly as UiPath, but it’s still down 18% through 2024. It was one of her biggest purchases on Friday.
PagerDuty is a cloud-based provider of enterprise analytics and uptime monitoring. Business is slowing. The 16% revenue growth it reported for its fiscal year 2024, which ended in January, is half the growth it posted in each of the previous two years. The pace of the slowdown is even more pronounced on a quarterly basis, including its latest update on Thursday.
Here is PagerDuty’s year-over-year revenue growth through mid-fiscal year 2023:
Q2 2023: 34%
Q3 2023: 31%
Q4 2023: 29%
Q1 2024: 21%
Q2 2024: 19%
Q3 2024: 15%
Q4 2024: 10%
Q1 2025: 8%
Some positives are that analysts see revenue growth accelerating again later this year and posting double-digit percentage growth over the past year. Unlike Palantir and UiPath, PagerDuty shares jumped Friday following its latest financial update. Wood isn’t just buying on dips in this market.
Should you invest $1,000 in Palantir Technologies right now?
Before you buy stock in Palantir Technologies, consider this:
Motley Fool Stock Advisor The analyst team has just identified that they believe 10 Best Stocks There are a few things investors need to buy now… and Palantir Technologies wasn’t one of them. The 10 stocks picked could deliver outrageous returns in the years to come.
Consider when nvidia This list was created on April 15, 2005… If you had invested $1,000 at the time of our recommendation, You’d have $671,728,
Stock Advisor Provides investors with an easy-to-understand blueprint for success, including guidance for building a portfolio, regular updates from analysts, and two new stock picks each month. Stock Advisor The service is more than four times S&P 500 Returns Since 2002*.
*Stock Advisor returns as of June 3, 2024
Rick Munarriz The Motley Fool has positions in UiPath. The Motley Fool has positions in PagerDuty, Palantir Technologies, and UiPath and they recommend it. The Motley Fool has positions in PagerDuty, Palantir Technologies, and UiPath and they recommend it. Disclosure Policy,
Cathie Wood strikes back: The 3 stocks she bought last week Originally published by The Motley Fool
Disclaimer : The content in this article is for educational and informational purposes only.
