We're a long way from 2020, when Cathie Wood turned heads as the co-founder CEO of the Ark Invest family of exchange-traded funds (ETFs). Most of the Ark funds more than doubled that year, only to fall sharply in 2021 and 2022. Wood is beating the market again in 2023, but there's been a little turbulence this summer.
Thankfully for Wood, she doesn't mind the volatility. She's often adding to some of her largest positions when they take a step back. She added to her existing stakes in Palantir Technologies (PLTR 3.73%), Teladoc Health (TDOC -2.40%), and Ginkgo Bioworks (DNA 10.60%) on Thursday. Let's take a closer look.
1. Palantir Technologies
Shares of Palantir have taken a 31% hit since hitting a 52-week high last month, including a 5% decline on Thursday. Wood is feeling opportunistic. She bought more than 1 million shares of the software builder for the intelligence community on Thursday.
There wasn't a negative Palantir-specific development to trigger Thursday's markdown. The day actually began with another win for Palantir, announcing a five-year deal to provide its generative artificial intelligence (AI) platform to Houston-based investment manager CAZ Investments. Palantir's AI-powered solutions will help accelerate partner onboarding at CAZ and augment the firm's managerial work. It's another win in the financial sector, where Palantir has been able to expand its reach following its initial foothold doing government work.
Image source: Getty Images.
Palantir has its critics, given the controversial nature of its data-mining prowess, but it's still one of this year's biggest winners even after the recent correction since early August. The stock has still more than doubled in 2023, a popular choice for investors looking to play the AI hype responsible for many of this year's top gainers.
The good news is that Palantir is now profitable, but not to the point where the recent pullback is wooing value investors. This is still a growth company, even if top-line gains are decelerating for the third year in a row. There are naturally things far worse than being in the black and posting double-digit revenue growth.
Wood is obviously a fan. It's one of the few stocks that she owns in all six of her Ark Invest ETFs.
2. Teladoc Health
Teladoc is now one of Wood's 10 largest investments across all the Ark Invest funds, but it didn't earn its way up the chart. The telehealth services provider has been one of her biggest laggards, hitting another multiyear low on Thursday when the stock broke below $20 for the first time in more than six years. The stock is off a blistering 94% since hitting its high-water mark in early 2021.
Demand has slowed for Teladoc's platform, where folks can enter into a video consultation with a doctor, mental health professional, dietitian, or dermatologist to receive primary care. The pandemic-era limitations for in-office visitations are essentially over now. The business is still growing -- up 10% in its latest quarter -- but it's been nine consecutive reports of decelerating year-over-year gains on the top line.
Wood's been buying all the way down, but it makes sense. Teladoc's platform is no longer necessary, but it was a growing business even before the COVID-19 crisis accelerated its prospects. Patients save time and money on the platform. Employers appreciate not losing a key hire for a good chunk of the day for an in-office visit. The medical pros on the platform also have a way to generate incremental income.
With deficits narrowing, as long as revenue growth remains positive, it may not be long before Teladoc stops calling in sick as an investment.
3. Ginkgo Bioworks
Wood owns a thick slice of Ginkgo Bioworks, and her piece of the pie is getting bigger. She now owns more than 10% of total shares outstanding of the biosecurity and biofoundry specialist.
This is another stock that has seen better days. It's trading 89% below the all-time high it hit shortly after going public in 2021. It was a rock star back then. Revenue was skyrocketing as it helped with COVID-19 screenings at schools and airports. Unlike Teladoc, which is still finding ways to grow in 2023, Ginkgo has been fading.
Its most recent report was a dud, particularly when it came to Ginkgo's revised outlook. The $245 million to $260 million it's now targeting in revenue for all of 2023 is well below the $478 million it posted last year. The good news here is that analysts see revenue growth resuming next year.
