This year has been quite a rollercoaster for Cathie Wood, co-founder, and CEO of Ark Invest. Her portfolio has taken a hit, with many of her favorite stocks experiencing a downturn despite the overall market trend. In fact, Ark Invest’s primary exchange-traded fund (ETF) is currently trading 4% lower year-to-date. Notably, some of Wood’s top holdings, including Tesla, Roku, and Roblox, have seen declines ranging from 20% to 31% since the beginning of the year. However, despite the turbulence, Wood decided to capitalize on the opportunity and increase her positions in all three companies recently.
1. Tesla: Down 31%
After a remarkable surge in 2023, Tesla’s stock price has been on a downward trajectory this year. The EV pioneer’s latest financial results for the fourth quarter failed to meet market expectations, leading to a modest 3% revenue increase and a significant 40% drop in adjusted earnings per share. Analysts anticipated stronger performance across the board.
Murmurs of slowing sales growth and shrinking margins have been circulating, attributed to Tesla’s aggressive price cuts aimed at matching increased production rates. Despite a notable 20% surge in new unit deliveries in Q4, lower average selling prices and a shift towards more affordable models have impacted the company’s financials. Concerns about lackluster first-quarter results have persisted, prompting analysts to revise their projections downwards.
Despite the challenging environment, Wood remains optimistic about Tesla’s prospects, citing historical resilience in the face of adversity. The company continues to hold a significant position in Ark Invest’s portfolios.
2. Roku: Down 29%
Roku, a prominent holding in Ark Invest’s portfolio, experienced substantial growth in 2023 but has faced hurdles this year. With an expanding user base of 80 million active accounts, Roku is striving to enhance engagement levels. However, concerns loom regarding profitability, compounded by intensified competition in the market.
Although Roku is yet to achieve profitability, recent initiatives aim to steer the company towards a sustainable bottom line. Wood’s strategic focus remains unwavering as she analyses the long-term potential of this volatile streaming services stock.
3. Roblox: Down 20%
Roblox, Ark’s tenth-largest holding, demonstrated significant growth in 2023 but faced a slight decline in the early months of 2024. Despite widening loss forecasts, the gaming platform developer impressed investors with robust fourth-quarter results, showing promising revenue and booking growth.
Rebounding from a dip in daily active users last year, Roblox is charting a path towards renewed popularity. Wood doubled down on her investment in the company as she remains confident about its growth trajectory.
Overall, Cathie Wood’s recent moves signal a strategic approach to capitalize on market fluctuations, showcasing her confidence in the long-term potential of these companies despite short-term challenges.