Change is inevitable, of course, but Cathie Wood says make sure you’re on the right side of it.
Wood, CEO of Ark Investment Management, has declared on the firm’s website that “we invest solely in disruptive innovation.”
Related: Cathie Wood buys $38 million of surging tech stock
The world is currently going through some rather humongous and disruptive changes, thanks largely to the growth and potential impact of artificial intelligence.
Wood, who once said that the “strongest bull markets I’ve been in are built on walls of worry,” has been a controversial figure over the years, with supporters dubbing her Mama Cathie, and detractors slamming her investment style.
So, who is she?
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Born in Los Angeles, Wood attended the University of Southern California, where she was mentored by the renowned economist Arthur Laffer, adviser to Presidents Ronald Reagan and Donald Trump.
Laffer got Wood a job as an assistant economist at Capital Group in 1977.
In 2001, she joined AllianceBernstein as chief investment officer of global thematic strategies, where she managed $5 billion and where she was criticized for performing worse than the overall market during the 2007–2008 financial crisis.
Cathie Wood, CEO and chief investment officer of Ark Invest, speaks during the Milken Institute Global Conference on May 2, 2022, in Beverly Hills, Calif. (Photo by Patrick T. Fallon/AFP via Getty Images.)
PATRICK T. FALLON/Getty Images
Ark focuses on emerging companies
Wood parted company with AllianceBernstein in 2014 after the firm decided that her idea for actively managed ETFs based on disruptive innovation was too risky.
She founded Ark Investment and named the company after the Ark of the Covenant.
Related: Cathie Wood sells $48 million of battered tech stock
Ark ETFs usually purchase emerging-company stocks in the high-tech categories of artificial intelligence, blockchain, DNA sequencing, energy storage, and robotics.
Critics have not been enamored of Wood’s results, with investment research titan Morningstar blasting her firm in February as the single fund that has destroyed the most wealth over 10 years, to the tune of roughly $14.3 billion.
“We do not fit into their style boxes,” Wood has said about her critics. “And I think style boxes will become a thing of the past, as technology blurs the lines between and among sectors.”
Fintech SoFi Technologies (SOFI) and big data analytics company Palantir (PLTR) are two of the largest names in the tech sector right now and Wood recently shed shares of both companies.
Ark Fintech Innovation ETF (ARKF) sold 82,872 shares of SoFi on Nov. 22 for a total of $1.24 million. The fund currently has $58.72 million of SoFi shares.
SoFi shares are up 59.5% year-to-date.
Last month, SoFi beat Wall Street’s earnings expectations, and at the time TheStreet Pro’s Stephen Guilfoyle said SoFi CEO Anthony Noto “is not missing a beat.”
“Longtime investors in SOFI, I am sure, have noticed that every time the stock has dipped, really since Noto took on this role, he has added to his stake in the firm with his own cash,” the veteran trader said. “Noto, as he has shown throughout his career, is a leader.”
Ark Innovation ETF (ARKK) shed 73,021 shares of Palantir totaling $4.48 million. The fund currently has $353.9 million of the data-analytics-software company’s stock.
Palantir, which was recently added to the S&P 500, has established itself as a key player in the defense industry, with a host of contracts with domestic and international agencies that focus on its data-analytics and AI technologies.
Analyst says Palantir poised to dominate
The company’s shares are up 276.4% year-to-date and 236.6% from a year ago.
Investment firms were adjusting their price targets for Palantir on Nov. 25.
Fund manager buys and sells:
Cathie Wood buys $38 million of surging tech stockCathie Wood sells $48 million of battered tech stockCathie Wood sold $12.8 million of soaring fintech stock
Bank of America Securities analyst Mariana Perez Mora boosted the investment firm’s price target on Palantir to $75 from $55, according to The Fly.
The company has shown itself able to digitize enterprises and battlespaces from finances to missile production, she said. The analyst sees Palantir as “the enabler and winner in this new era” where efficiency, innovation, safety, and speed are the most valuable assets.
Software represents 17% of U.S. nonresidential private fixed investments, said Mora, who thinks Palantir is “poised to dominate” as companies turn to software and AI to grow margins, rather than through scale with fixed assets.
B of A has a buy rating on Palantir shares.
Wedbush analyst Daniel Ives raised the firm’s price target on Palantir to $75 from $57 and kept an outperform rating on the shares. The decision reflected his increased confidence in what he called Palantir’s game-changing artificial intelligence platform strategy with use cases for AI taking hold over the next 12 to 18 months.
Ives described Palantir as the “Messi of AI growth story,” a reference to the Argentine soccer legend Lionel Messi. He said PLTR would see unprecedented demand as more enterprises realized the value of Palantir’s product suite with more AI use cases.
Ives said those use cases are “exploding,” the enterprise consumption phase will begin in 2025 with a launch of large language models across the board, and the true adoption of generative AI will be a major catalyst for the software sector.
To reflect Wedbush’s increased bullishness on the next phase of the AI revolution in the software sector into 2025, Ives upgraded Elastic (ESTC) and Snowflake (SNOW) to outperform while also raising his price target on Salesforce (CRM) to $375 from $325.
Related: Veteran fund manager sees world of pain coming for stocks
