Cathie Wood, principal at Ark Investment Management, is known for actively trading technology stocks that she believes will revolutionize industries.
He frequently adjusts his positions and sells shares when prices rise.
That's what he's been doing with a well-known tech stock in recent weeks.
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Investors and analysts have mixed feelings about Cathie Wood. Her supporters see her as a technology investing visionary, while critics say she is just a mediocre asset manager.
Wood's followers affectionately nicknamed her “Mama Cathie” after she turned heads with a remarkable 153% performance in 2020.
However, its long-term performance is not so rosy:
ARK Innovation's Flagship ETF (SHEET) With $6.7 billion under management, it returned 19.09% over the trailing 12 months, with a three-year annualized return of -11.28% and a five-year return of 2.91%.
By comparison, the S&P 500 gained 25.96% last year, with a three-year annualized return of 9.85% and a five-year return of 14.51%.
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Cathie Wood's Investment Strategy Explained
Cathie Wood's investment strategy is simple: her ARK ETFs typically buy stocks of high-tech startups in fields such as artificial intelligence, blockchain, biotechnology, and robotics.
Wood believes these companies have the potential to reshape industries, but their volatility causes large fluctuations in ARK fund values.
Investment research firm Morningstar slammed Cathie Wood and the ARK Innovation ETF.
Related: Cathie Wood Net Worth: Ark Invest CEO's Wealth and Income
Amy Arnott, a portfolio strategist at Morningstar, estimated that Ark Innovation wiped $7.1 billion of shareholder wealth from its inception in 2014 through 2023. That put the ETF third on her list of wealth destruction for mutual funds. and ETFs over the last decade.
Wood recently expressed optimism about a move toward fewer regulations under President Donald Trump, especially in areas such as technology, cryptocurrencies and digital assets.
“Over the last four years, we've seen a massive concentration toward very few stocks,” Wood said on CNN's Inside Politics on Sunday, December 2024. “I think the market is going to broaden right now and reward companies that are at the forefront.” vanguard of innovation. .”
However, not all investors are convinced of Wood's confidence. Over the past year, the Ark Innovation ETF saw a net outflow of $3.1 billion, and $154 million left the fund last week, according to ETF research firm VettaFi.
Cathie Wood sold 221,950 Palantir shares
From January 3 to 7, Wood's ARK Funds sold 221,950 shares of Palantir Technologies (PLT) .
That portion of the stock was valued at approximately $16.9 million.
Palantir quadrupled (up 340%) in 2024, making it one of the biggest Nasdaq gainers of the year. The rally was driven by the company's growing role and strong demand for ai-powered data analytics.
Palantir is widely used by governments for intelligence and defense, and is used by businesses for data-driven operations. Their products help them detect patterns and discover key information in large data sets.
Related: Analysts Reveal ai Stock Picks for 2025, Including Palantir
Still, investors are increasingly concerned about the stock's valuation, saying it could be overvalued after the big rally.
Wood has been cutting his stake in Palantir over the past month:
- On December 6, it sold 95,570 shares valued at $7.3 million.
- On December 19, it sold 33,402 shares valued at $2.5 million.
- From December 23 to 26, it sold 168,510 shares valued at $13.8 million.
Despite these sales, Palantir remains an important position in Wood's portfolio.
As of January 9, Palantir is ranked 5th on Ark Innovation (SHEET) 's holdings, representing 4.92% of the fund with a total market value of $315.3 million.
Palantir shares have lost about 10% over the past week. The stock closed at $68.23 on January 8.
Veteran trader rolls up Palantir stock after Wood sale
Is it time to buy the dip at Palantir? Wall Street veteran Stephen “Sarge” Guilfoyle doesn't think it's time yet.
“Palantir investors, including myself, one of the best-known PLTR bulls, have taken token gains at price targets and tried to buy them back lower when given the opportunity,” Guilfoyle. wrote on January 8.
Guilfoyle successfully predicted Palantir's growth as early as May 2024. He's not too worried about the long-term outlook for Palantir stock, stating a $90 price target for the stock.
“PLTR remains the king of big data-centric, ai-based analytics software, and there is no shortage of demand for these services,” Guilfoyle said.
Related: Veteran Fund Manager Offers Alarming Forecast for the S&P 500
