It's been a bit of a tough year for Cathie Wood, the maverick fund manager and chief of Ark Invest. She forged a reputation as a risk taker and won a lot of followers over the years -- and some naysayers. This was in part due to her penchant for huge claims, like her $2.3 million price target for Bitcoin, and in part because of her track record over the last few years.
Wood's flagship fund, the Ark Invest Innovation ETF, missed out on much of what has been the defining innovation of the last few years, artificial intelligence (AI). She was an early skeptic on Nvidia and a huge proponent of Tesla. Ark's flagship ETF is down roughly 19% in 2024, while the Nasdaq Composite is up more than 13% in the same time period.
Just because Wood hasn't done a stellar job picking stocks recently doesn't mean her streak will continue. Her run in 2021 was pretty impressive. And maybe that Tesla bet really will pay off someday.
When the market dropped from its recent highs, Wood had the opportunity to hit the bargain bin. Let's take a look at a few stocks she purchased.
Wood scooped up shares of AI powerhouse Amazon
Wood bought more than $1 million worth of Amazon (AMZN +2.17%) shares across five of her funds in the week of Aug. 11. She purchased them for about 10% less than what they were trading for the prior week. I'd say that's a decent discount.
NASDAQ: AMZN
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I think it's a great pick, as well. I've been a big fan of Amazon (as an investment) for some time. The company has positioned itself to take full advantage of the AI revolution while strengthening its core e-commerce business.
It posted some relatively disappointing revenue growth for Q2 recently, up a tepid 10% year over year, but its earnings-per-share (EPS) growth was phenomenal and beat estimates. The company nearly doubled its EPS for the quarter, compared to last year.
Amazon still controls the vast majority of online retail, a market that will continue to gain on its brick-and-mortar sibling. The company is also the market leader in cloud infrastructure, which will allow it to reap the rewards of generative AI as that technology takes off. If those two weren't enough reasons to buy, the company's advertising segment is growing at lightning speed.
AI-powered medicine is a big bet for Wood
Wood bought more than $1.5 million worth of Tempus AI (TEM +0.65%) shares for two of her funds. This was at a more than 15% discount from the stock's peak at the end of July.
Tempus is an interesting play. It uses AI to create precision medicine solutions -- i.e., solutions tailored to the individual -- for patients in oncology, cardiology, and who are suffering from depression. If the tech can be proven at scale, it could be a significant leap in treating these areas of disease.
The company has yet to turn a profit, but it's far from pre-revenue, pulling in more than $530 million last year.
Another health-tech company was one of Wood's biggest buys
Natera (NTRA +1.15%) is a genetic testing company that specializes in non-invasive solutions. This one didn't come at a discount -- the stock has steadily marched upward as the company has continued to report solid numbers. Natera is still in the red, but it's been marching toward turning a profit at increasing speed. The company's latest earnings smashed expectations, beating EPS estimates by more than 50%.
However, I would exercise caution with Natera. It's facing a class-action lawsuit alleging it engaged in unfair and deceptive billing practices. This wasn't the first time the company faced similar charges. It settled a lawsuit in 2018 brought by the Department of Justice on allegations of fraud for $11 million.
Of course, companies face lawsuits all the time. This suit may be baseless, but for my money, I'd look elsewhere.
