Cathie Wood has been under attack since the initial monster generated for fund holders in 2020. The founder, CEO, and investors in Ark Invest have lost significantly in the market in the last two or three years, and they are fighting back. in 2024.
But that doesn’t mean he’s standing still. Ark Invest was especially busy adding some positions last week. Wood is the buyer Palantir (NYSE: PLTR), UiPath (NYSE: PATH)and PagerDuty (NYSE: PD) last week. Let’s take a closer look.
1. Palantir
Most of Wood’s Ark Invest funds have sold in double figures this year, but not all of his biggest holdings are lagging behind. Palantir, one of the 10 largest conglomerates, is up 26% year to date in 2024.
Palantir is a provider of software solutions for the intelligence community, based on artificial intelligence (AI), data science, and machine learning to transform big data into actionable propositions. After three years of decelerating revenue growth, the top-line gained pace for three consecutive quarters.
The market was unhappy with Palantir’s first-quarter results last month, sending shares lower. The stock has beaten the market this year, but is trading 60% higher year-to-date at its spring peak.
Investors are not happy with the guidance provided, but there are worse things than the 22% revenue growth suggested by the midpoint. This would still translate into Palantir’s fourth consecutive period of accelerating year-over-year growth. But Palantir sees top-line growth slowing in the latter half of 2024.
Now, Palantir is attracting investors as an AI play. It also makes progress because it is different from the fortress as a government contractor. Stateside commercial revenue grew 40% last quarter, roughly twice as fast as the balance of business.
2. UiPath
The good news is that Wood is a UiPath buyer on Thursday, as shares fell 34% after a poorly received financial update. It’s the biggest buy for Ark Invest’s five exchange-traded funds, so they’re definitely buying.
The bad news is that Wood was also a buyer of the robotics and automation software specialist on Tuesday, a day before UiPath posted its first-quarter numbers. In short, Wood buys the gap before buying the dip. The stock has now shed more than half of its value since the start of the year.
UiPath’s 16% growth in revenue for the fiscal first quarter announced after Wednesday’s market close is actually just ahead of where analysts were perched. The bad news is beyond the low beat. UiPath releases a full year of guidance. Also announcing that the CEO is stepping down rarely bodes well for a growing business.
3. Fence Duty
UiPath isn’t the only stock Wood added last week that has fallen sharply this year. PagerDuty stock isn’t as good as UiPath, but it’s still down 18% in 2024. It was one of Friday’s biggest buys.
PagerDuty is a cloud-based provider of enterprise analytics and uptime monitoring. Business is slow. The 16% in revenue growth posted for the 2024 fiscal year ending in January is half of each of the previous two years. The pace of the deceleration has been more pronounced every month, including Thursday’s latest update.
Here’s PagerDuty’s year-over-year revenue growth starting in mid-fiscal 2023:
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Q2 2023: 34%
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Q3 2023: 31%
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Q4 2023: 29%
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Q1 2024: 21%
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Q2 2024: 19%
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Q3 2024: 15%
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Q4 2024: 10%
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Q1 2025: 8%
Some bullish considerations are that analysts see revenue growth accelerating again later this year and have posted double-digit percentages on the bottom line over the past year. Unlike Palantir and UiPath, PagerDuty’s stock rose on Friday after its latest financial update. Wood is not the only buy on dips in this market.
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Rick Munarriz has a position at UiPath. The Motley Fool positions and recommends PagerDuty, Palantir Technologies, and UiPath. The Motley Fool has a disclosure policy.
Cathie Wood Fights Back: 3 Stocks We Bought Last Week was originally published by The Motley Fool
