Cathie Wood buys $25.9 million of major tech stock

Cathie Wood, chief of Ark Investment Management, often buys tech stocks during earnings seasons.

That’s what she has done this week. Wood uses earnings seasons as an opportunity to adjust her positions.

Investors and analysts are divided on Wood. Her supporters argue she has a visionary grasp of tech investing, while critics see her as just a mediocre money manager.

Wood, affectionately known as “Mama Cathie” among her fans, gained widespread attention with an impressive 153% return in 2020 and her clear, accessible explanations of her strategy across media outlets.

However, her longer-term performance tells a different story.

Ark's leading fund, the Ark Innovation ETF (ARKK) , managing $5.8 billion in assets, has posted a -7.91% return year-to-date, a -26% return over three years, and a 2.3% gain over five years.

This contrasts sharply with the S&P 500, which is up 23% in 2024, 9.8% over three years, and 15.6% over five years.

Wood defends her approach, saying that “the macro environment and some stock picks have challenged our recent performance.”
PATRICK T&period; FALLON/Getty Images

Cathie Wood’s investment strategy

Cathie Wood centers her investment approach on disruptive innovation, targeting high-growth tech sectors like artificial intelligence, genomics, and blockchain. Her strategy focuses on long-term potential and emerging technologies despite short-term market volatility.

Wood believes companies in these areas will potentially deliver substantial returns. However, high-growth stocks are known for their volatility, leading to frequent fluctuations in the value of Ark’s funds.

Morningstar, a prominent evaluator of mutual fund and ETF performance, has been critical of Wood and the Ark Innovation ETF.

Morningstar analyst Robby Greengold commented in a report that investing in early-stage companies with limited earnings "requires forecasting skill, which ARK Investment Management lacks." He noted that Ark’s results have swung from "tremendous to horrendous."

In a July 2024 blog post on Ark’s website, Wood defended her approach, saying that “the macro environment and some stock picks have challenged our recent performance.”

Still, she affirmed her “commitment to investing in disruptive innovation,” adding that many Ark holdings are now in “rare, deep value territory.”

Some investors remain skeptical. Over the past 12 months, Ark Innovation ETF has experienced a net outflow of $2.41 billion, per ETF research firm VettaFi.

Cathie Wood buys 43,833 shares of Meta Platforms

On Oct. 28 through 30, Ark Funds purchased 43,833 shares of Meta Platforms (META) . That chunk of stock was valued at roughly $25.9 million as of the Oct. 30 close.

Meta reported its third-quarter earnings on Oct. 30.

Meta posted weaker-than-expected user growth and a projected increase in infrastructure expenses for 2025.

Meta’s earnings per share came in at $6.03, surpassing analyst estimates of $5.25, while revenue reached $40.59 billion, up 19%, topping expectations of $40.29 billion.

However, the company reported weaker-than-expected user growth. Daily active users reached 3.29 billion, a 5% increase from last year but slightly under the 3.31 billion analysts anticipated.

Meta is expanding data centers to meet the demands of its new infrastructure.

Fund manager buys and sells:

“Our AI investments continue to require serious infrastructure, and I expect to continue investing significantly there, too,” Meta CEO Mark Zuckerberg said during the earnings call.

For Q4, Meta expects revenue between $45 billion and $48 billion, with the midpoint above analysts' estimates of $46.3 billion.

Meta stock is not in Ark Innovation ETF's (ARKK) top 10 holdings as of Oct. 31.

Read news from 100’s of titles, curated specifically for you.

Already a member? Sign in here