Cathie Wood has been under fire since the first monster returns she produced for her fundholders in 2020. The co-founder, CEO and investor of Ark Invest has lost heavily in the market over the past two years, and she’s struggling again in 2024.
But that doesn’t mean she stands still. Ark Invest was particularly busy last week expanding some existing positions. Wood was a buyer of Palantir (NYSE:PLTR), UiPath (NYSE: PAD)And PagerDuty (NYSE: PD) last week. Let’s take a closer look at that.
1. Palantir
Most Wood’s Ark Invest funds are trading in double digits this year, but not all of its biggest investments are laggards. Palantir, one of its 10 largest combined holdings, is up 26% so far in 2024.
Palantir is a provider of software solutions for the intelligence community, leaning on artificial intelligence (AI), data science and machine learning to turn big data into actionable propositions. After three years of declining sales growth, sales growth has accelerated for three consecutive quarters.
The market wasn’t happy with Palantir’s first-quarter results last month, sending shares tumbling. The stock is beating the market this year, but is trading 60% higher at its spring peak so far.
Investors weren’t happy with the guidance the report provided, but there are things much worse than the 22% revenue growth the midpoint of the outlook suggests. It would still translate into Palantir’s fourth straight period of accelerating year-over-year growth. But Palantir sees revenue growth slowing in the second half of 2024.
For now, Palantir is trying to win over investors as an AI play. It is also making progress as it moves away from its stronghold as a government contractor. Commercial revenues in the United States rose 40% in the last quarter, about twice as fast as the rest of the business.
2. UiPath
The good news is that Wood was a buyer of UiPath on Thursday, when the stock plunged 34% after a poorly received financial update. It was the biggest purchase for five of Ark Invest’s exchange-traded funds, so she definitely bought the dip.
The bad news is that Wood was also a buyer of the robotics and automation software specialist on Tuesday, the day before UiPath posted its first-quarter results. In short, Wood bought the cliff before he bought the dip. The share has lost more than half its value since the beginning of the year.
UiPath’s 16% revenue growth for its fiscal first quarter, which it announced after the market closed on Wednesday, was actually just ahead of what analysts were expecting. The bad news outweighed the slight setback. UiPath has lowered its expectations for the full year. It also announced that its CEO would be stepping down, which is rarely a good prospect for a growing company.
3. PagerDuty
UiPath isn’t the only stock Wood added to last week that has fallen sharply this year. PagerDuty stock isn’t doing as bad as UiPath, but is still down 18% through 2024. It was one of her biggest purchases on Friday.
PagerDuty is a cloud-based provider of business analytics and uptime monitoring. Things are slowing down. The 16% revenue growth it posted for the 2024 fiscal year ended in January was half of what it was in each of the previous two years. The pace of the slowdown is even more apparent on a quarterly basis, including Thursday’s latest update.
Here is PagerDuty’s year-over-year revenue growth since mid-fiscal year 2023:
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Q2 2023: 34%
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Q3 2023: 31%
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Q4 2023: 29%
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Q1 2024: 21%
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Q2 2024: 19%
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Q3 2024: 15%
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Q4 2024: 10%
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Q1 2025: 8%
A few positives are that analysts see revenue growth to accelerate again later this year and earnings growth is up double digits over the past year. Unlike Palantir and UiPath, PagerDuty shares rose on Friday after its latest financial update. Wood is not only purchased during the dips in this market.
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Rick Munarriz holds positions in UiPath. The Motley Fool holds and recommends positions in PagerDuty, Palantir Technologies, and UiPath. The Motley Fool has a disclosure policy.
Cathie Wood Fights Back: 3 Stocks She Bought Last Week was originally published by The Motley Fool
