3 stocks Cathie Wood is buying in the second half of the year
The first half of the year was difficult for Cathie Wood. The co-founder, CEO and investor at Ark Invest saw her family of aggressive growth exchange-traded funds significantly underperform the market. But she's not giving up...
Wood publishes Ark Invest's daily transactions and on Monday, as the second half of 2024 begins, she made some significant purchases. Some of the most interesting companies she bought this week include Palantir, Archer Aviation and Intellia. All are already part of the Ark Invest portfolio. Let's take a closer look at some of its early purchases in the second half of this year.
Palantir $PLTR+5.3%
Palantir
PLTRMost of Ark Invest's largest holdings have lagged the market this year, but Palantir isn't one of them. Shares of the provider of software solutions for the intelligence community are up 55% in 2024, more than quadrupling since the start of last year. It is now the seventh largest holding in all of Ark Invest's funds.
Many technology providers have seen their business slow down, but year-on-year revenue growth at Palantir has been accelerating over the past three quarters. The midpoint of the previous outlook for the quarter that ended over the weekend suggests that revenue growth will increase for the fourth financial period in a row. The market has been boosting the stock prices of companies that have a legitimate artificial intelligence (AI) catalyst, but Palantir is actually earning its profits thanks to an improving business.
The last major analyst move was less than two weeks ago, when Brian White of Moness Crespi downgraded the stock from neutral to sell on valuation concerns. He is generally concerned about AI and enterprise software stocks moving higher despite a less than inspiring earnings season. His target price is $20.
Palantir's latest outlook suggests that business will slow in the second half of the year, but momentum is on their side. One of the more encouraging trends at Palantir is how the company, which once relied almost exclusively on government contracts, is now successfully turning to corporate America to offer its high-tech solutions. And it's working. A 40% jump in commercial sales last quarter nearly doubled its overall revenue growth of 21%.
Valuations will be an issue for any stock that has quadrupled in the past 18 months. However, let's not forget Palantir's improving fundamentals.
Archer Aviation $ACHR+4.5%
Archer Aviation Inc.
ACHROne of Wood's Monday buys that hasn't fared as well as Palantir this year is Archer Aviation. The stock is down 35% this year, even though it more than tripled last year.
Wood owns several companies specializing in next-generation short-haul air travel, and Archer is one of her biggest bets in that area. Archer offers electric vertical takeoff and landing (eVOTL) aircraft designed to help affluent clients move more quickly in densely populated cities than conventional ground-based options.
Archer is a pre-revenue player that naturally loses money while striking potentially lucrative partnership deals for its future fleet of high-tech air taxis. Last month, it announced plans to create an air mobility network to serve five key locations in the San Francisco area. Investors are hoping that once the fleet takes off, the stock will follow suit.
Intellia Therapeutics $NTLA-0.8%
Intellia Therapeutics can't seem to find its "happiness." Shares of this poorly performing gene-editing company are down 28% this year and are trading more than 35% lower since the beginning of last year. Intellia is developing some therapies based on CRISPR technology and even has several entering critical Phase III clinical trials.
Last week, Intellia announced that its CFO would step down. It's not a good sign when a chief financial officer leaves a company, but it doesn't mean anything is amiss. Executives leave for a variety of reasons. As long as Intellia continues to make promising advances in its potentially breakthrough therapies, Wood can't be blamed for buying when the price drops.
Disclaimer: There is a lot of inspiration to be found on Bulios, but stock selection and portfolio construction is up to you, so always do a thorough analysis of your own.
Source: Yahoo Finance, CNBC.