Ark Invest co-founder and CEO Cathie Wood is one of the best-known growth investors in the realm of exchange-traded funds (ETFs). She also happens to be one of the most aggressive, loading up Ark Invest with high-flying and disruptive investments.
Ark publishes its transactions at the end of every trading day. Wood added to her existing stakes in Roblox (RBLX 1.39%), Amazon (AMZN +0.20%), and PagerDuty (PD 1.06%) on Thursday. Let's take a closer look.
NYSE: RBLX
Key Data Points
1. Roblox
If Wood believes in a company, she has no problem taking advantage of a sell-off. Shares of Roblox plummeted 11% on Thursday after the company posted a poorly received financial update. It got Wood's attention. She bought additional shares of the online gaming platform developer in three of her ETFs.
It was a "beat and graze" performance. Roblox delivered a beat on the top and bottom lines. Revenue rose 32% to $988 million in the fourth quarter, accelerating from its pace through the first nine months of the year and topping its earlier guidance of $930 million to $950 million. Roblox also came through with a smaller deficit than expected.
Image source: Getty Images.
Here comes the "graze" part. Bookings -- a critical metric for Roblox and its gaming peers -- rose a weaker-than-expected 21% to reach $1.36 billion. Unlike its revenue showing, bookings growth actually decelerated in the final quarter of 2024. This isn't the only problem. Average daily active users rose 19% to 85.3 million, and that's good. Bookings per daily active user rose just 1%, and that's bad.
Bulls will argue that double-digit expansion for revenue, bookings, and player base are encouraging for the popularity of Roblox. The $5.2 billion to $5.3 billion in bookings that Roblox is modeling for the new year translates into 19% to 21%, in line with its current run rate. The bears can counter that Roblox needs to do better. Even after Thursday's dip, the shares have still more than doubled since last year's springtime low. The red ink will continue, as the annual loss should top $1 billion at the midpoint of this week's guidance. However, Roblox should exceed $800 million in free cash flow. Betting against a gaming platform that is growing its audience and proving its stickiness could prove dangerous to the naysayers.
NASDAQ: AMZN
Key Data Points
2. Amazon
Wood doesn't just respond to fresh financials. Ark Invest purchased shares of Amazon on Thursday, just before the online retailing giant posted its fourth-quarter results after the market close. With analyst profit targets inching higher and new tariffs making it easier to compete against Chinese deep discounters, adding to her current position seemed like a good idea in theory. Reality had another plan.
Shares of Amazon moved initially lower after the company announced results for its seasonally potent holiday quarter. Like Roblox, the headline numbers were strong. Net sales rose 10% to $187.8 billion, just ahead of Wall Street pro forecasts. It would've been an 11% top-line jump if it weren't for the rising dollar gnawing away at the value of international sales. Its cloud-hosting Amazon Web Services (AWS) platform continues to be the growth leader, clocking in with a 19% year-over-year rise.
Its profitability grew even faster, and net income of $1.86 a share is well ahead of the $1.46 a share the market was expecting. Amazon scored double-digit-percentage beats on the bottom line through 2024, including back-to-back quarters of 25% positive surprises to close out the year.
Amazon's stumbling block was its uninspiring guidance. The e-commerce giant is projecting 5% to 9% growth in net sales for the current quarter. It's bracing for gustier headwinds on the currency front, but even adjusting for that 150-basis-point hit, the midpoint of its outlook still translates into revenue growth decelerating to the high single digits. The midpoint of its operating income forecast is just a 5% rise. After three consecutive years of sub 12% net sales growth, 2025 is off to a rough start.
NYSE: PD
Key Data Points
3. PagerDuty
Wood was aggressively buying shares of PagerDuty until the summer of last year. She even bought shares every trading day in June. Her final purchase came in late September, but she was a buyer again on Thursday.
Unlike Roblox and Amazon with stocks that have soared 65% and 41% respectively over the past year, PagerDuty has been a laggard. Shares of the cloud-based provider of enterprise analytics and uptime monitoring solutions have fallen 20% over the past year. Revenue growth has been slowing over the past two years, but let's check the tape of top-line jumps.
- Q2 2023: 34%
- Q3 2023: 31%
- Q4 2023: 29%
- Q1 2024: 21%
- Q2 2024: 19%
- Q3 2024: 15%
- Q4 2024: 10%
- Q1 2025: 8%
- Q2 2025: 8%
- Q3 2025: 9%
After seven consecutive quarters of decelerating gains, revenue accelerated in PagerDuty's fiscal third quarter that ended in October. Its dollar-based net retention rate is also starting to rise again after a steady slide. If it can get back to double-digit revenue growth when it reports in a few weeks -- or at some point in fiscal 2026 -- PagerDuty has a good chance of bouncing back. Wood was too early when she was on her PagerDuty shopping spree last year, but her timing seems to be better now.
