Star investor Cathie Wood of Ark Investment Management has been adamant in recent weeks that the decline of tech stocks represents a buying opportunity rather than a sign of distress.
She defended her holdings of streaming platform Roku (ROKU), online videogame platform Roblox (RBLX) and video meeting service Zoom Video (ZM) in an interview with CNBC Thursday.
On Wednesday, Ark purchased 454,667 shares of Roblox, recently valued at about $24.7 million. Ark bought on a day when Roblox stock fell 27%, after it reported worse-than-expected earnings.
Wood wasn’t too concerned about the earnings report. “We think [Roblox] is one of the best ways to play the global metaverse out there,” she said. “We saw the stock hit very hard by some short-term numbers. We were impressed by the daily average user growth at 33%.”
A big question has been whether Roblox could expand its user base to people older than 13, Wood said. And the earnings report showed that for the first time more than half of Roblox users were indeed older than 13.
As for Roku, it represents the third biggest holding in Ark’s flagship fund, Ark Innovation ETF (ARKK).
“I know there’s a lot of angst about them potentially getting into the TV business, the hardware business.” Wood said. “They, of course, wouldn’t manufacture; they would outsource. They’re facing a lot of supply chain issues on the TV front, and I think they’re trying to take it into their own hands.”
The stock has given up 59% in the last six months. But don’t get distracted by the short term, Wood said, noting that she has a five-year investment horizon. “Roku is No. 1 in the connected-TV space,” she said.
When it comes to Zoom, it’s the No. 4 holding in the Ark Innovation ETF, and its stock has sunk 63% over the past six months. Zoom’s growth has slowed, with many workers going back to their offices, but its long-term growth path remains formidable, Wood said.
“It’s probably going to be the lowest point in their growth for the next few years,” she said.
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