Cathie Wood has some catching up to do this year. The co-founder, CEO and top stock picker of Ark Invest is still lagging the market. Its most popular aggressive-growth exchange-traded fund is trading just 3% higher in 2024, well below overall market averages. She doesn’t stand still.
Wood increased her existing interests Amazon (NASDAQ: AMZN), Sagittarius Aviation (NYSE: ACHR)And Joby Aviation (NYSE: JOBY) on Thursday. Let’s take a closer look at three of the thirteen stocks she bought on Thursday.
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The country’s largest online retailer has China on its mind these days. Bloomberg reports that the US House Select Committee, which is investigating strategic competition between the two countries, recently called Amazon employees to testify about the e-tailer’s shopping partnership with China’s TikTok.
On a more positive note, Amazon also launched Haul in beta this week. The new platform, rolling out within the updated Amazon app, offers a simple shopping experience full of deeply discounted merchandise. Most items on Haul cost less than $10. It’s a chance to compete against rivals Shein and PDD companies‘ Temu, two Chinese rivals courting customers in the United States with incredibly low prices.
Will work at Good? As a brand that American consumers know and trust, Haul’s likely faster execution, and the looming trade disputes and potential tariffs, it’s easy to see why the platform could be a hit. Will its potential success come at the expense of Amazon’s traditional storefront, which likely carries higher margins? It’s definitely something to watch out for, as Amazon is growing a lot slower than Shein and Temu. Amazon’s total net sales rose 11% in the latest quarter, but domestic e-commerce revenue rose only 9%. Temu parent company PDD will not report its third quarter results until next week, but saw turnover increase by 86% in the previous quarterly update.
If anyone is going to disrupt Amazon, it might as well be themselves. Amazon has more to offer than just selling things online. Popular cloud hosting company Amazon Web Services (AWS) is posting double-digit growth. Earnings per share rose 52% in the last quarter. With the robust holiday shopping season approaching, Haul will have to watch. Amazon’s expectations are for net sales growth of only 7% to 11% for the fourth quarter. We’ll see if Haul is a hit, a bust, or a hit that cannibalizes Amazon’s traditional storefront soon. Wood, of course, likes Amazon’s opportunities. She has built up her stake in Amazon in recent weeks.
Wood believes in the emerging field of next-generation short-haul air travel. Archer hopes to gain an early leadership position in electric vertical take-off and landing aircraft (eVTOL), transporting affluent customers from major airports to the heart of densely populated cities on lightweight aircraft that can reach their desired destinations much faster. than alternatives with traffic disruption.
Archer shares are down 30% in 2024, but the stock more than tripled last year. In other words, the stock has more than doubled since the beginning of last year. Archer is a pre-revenue company, but has partnerships and the potential to be a portfolio game changer for patient investors. Like most stocks that have yet to generate income, it is also risky.
The stock plunged 8% on Wednesday after Archer announced it would sell $70 million worth of shares. It’s a strange response considering $70 million is less than 4% of Archer’s current market cap. Wood probably saw an opportunity in the sale.
Let’s keep things moving by ending this list with Joby Aviation. It’s another upstart provider of air taxi services, and with a market capitalization of $4.5 billion, it’s the most valuable publicly traded player in this niche.
The eVTOL market has its ups and downs, and Joby is following a somewhat similar trajectory to Archer. The shares have almost doubled in 2023, but are losing to the market this year, down 11%. Like Archer, it has a cash-rich balance sheet to absorb short-term losses until it literally and figuratively takes off.
Joby has made some encouraging headlines internationally in recent weeks. But like Archer, investors will have to be patient before the sector goes mainstream.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Rick Munarriz has no positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy.
Cathie Wood Goes Bargain Hunting: 3 Stocks She Just Bought was originally published by The Motley Fool
