We're halfway through the second month of the year, and Cathie Wood has a lot of ground to make up. The Ark Invest founder, CEO, and ace investor finds her largest exchange-traded fund trading lower in 2024, even after a 5% surge on Wednesday.
She's still making moves, lately adding to some of her biggest gainers over the past year. Wood added to existing stakes in CrowdStrike Holdings (CRWD 2.03%), Meta Platforms (META 0.43%), and Archer Aviation (ACHR 1.00%) on Wednesday. Let's take a closer look.
1. CrowdStrike Holdings
Cathie Wood's funds may be lower this year, but you can't blame CrowdStrike. The cybersecurity specialist has seen its shares soar 31% so far this year, and that's on top of more than doubling in 2023.
Analysts are struggling to keep up. Eric Heath at Keybanc bumped his price target from $245 to $318 a month ago. On Wednesday, he jacked up that price goal to $375. It's a 53% overall hike in less than four weeks. He's naturally sticking to his overweight rating. Heath is upbeat about the fiscal fourth quarter CrowdStrike will discuss on March 5, backed by strong channel checks for its endpoint security and identity protection products.
Image source: Getty Images.
It's a good time for CrowdStrike's Falcon line of cloud-based cybersecurity solutions. Companies need to protect their sites and their customers, and you can't skimp on your reputation. Revenue rose 34% in its fiscal third quarter, ahead of expectations. Adjusted earnings soared 85%, trouncing Wall Street projections by at least 9% for the fourth period in a row.
CrowdStrike is also now profitable on a reported basis. Its guidance calls for 32% revenue growth in next month's fiscal first-quarter report, but the market has seen a steady string of "beat and raise" performances here. Expectations may be high, but reality has been even higher for CrowdStrike these days.
2. Meta Platforms
Meta was another big winner of 2023 that Wood was buying up on Wednesday. The parent company of Facebook, Instagram, and WhatsApp has seen its stock nearly quadruple since the start of last year. The crazy thing is that the stock is still somehow reasonably cheap.
Meta ended 2022 on a rough note, with top-line declines in the final three quarters. Revenue growth turned positive last year, accelerating every single quarter of 2023. The top line isn't the only thing moving higher. Wall Street continues to paint rosier portraits of the social media giant with every financial checkpoint.
Three months ago, analysts figured that Meta would earn $16.03 a share this new year and $18.78 a share next year. Those targets now stand at $19.92 and $22.96, respectively. Despite almost soaring fourfold since revenue growth turned positive, Meta is trading at a reasonable 21 times earnings. Put another way, you could've bought Meta at the beginning of 2023 for just a little more than 5 times what analysts now see it earning next year.
3. Archer Aviation
Wood is flying high on electric vertical takeoff and landing (eVOTL) aircraft upstarts. She owns significant positions in a couple of them, but Archer Aviation is one of her favorites. She now owns more than 9% of the company's total shares outstanding.
Archer won't be profitable anytime soon. It's going to take years before it generates meaningful revenue. That doesn't mean the stock isn't moving on news. Archer keeps scoring partnership deals and other wins as it builds out its next-generation fleet of air taxis. Two weeks ago, it announced it had completed its Midnight aircraft's first phase of the flight test program. This will still take years to play out, but momentum is building in its favor. Like CrowdStrike and Meta, Archer has more than doubled since the start of last year.
