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Katie Wood, founder of ARK Investment Management, remains a controversial figure in the investment community.
With a focus on innovation and disruptive technology, Wood's firm manages several exchange-traded funds (ETFs) filled with volatile and untested startups. Many are unprofitable and have stocks that periodically go through boom periods.
As a result, wood ETFs are subject to extreme highs and lows. Timber ETFs have easily outperformed the broader market during the stock market pandemic boom. For this reason, the economic press described him as a visionary.
Then the bear market of 2022 hit, and Wood's funds plummeted. Its flagship ETF, Ark Innovation (NYSEARCA: ARKK ), fell more than 80% from high to low, sparking a massive outflow of capital.
ARKK shares are now up 35% this year as markets, especially tech stocks, recover from the 2022 selloff. However, many of Katie Wood's investments remain risky, prompting investors below to exercise caution. These are EXACTLY three Katie Wood acts to look out for in August 2023.
Meta Platforms (META)
Meta Platforms (NASDAQ: META ) has been one of the best stocks this year and one of the top holdings in Cathie Wood's Ark Innovation ETF.
META shares are up 132% so far this year, leading most tech stocks and outperforming the broader market. The excellent performance comes as Meta focuses on cutting costs, achieving efficiencies and generating strong earnings that exceed Wall Street expectations.
One example is Meta's excellent financial results for the second quarter, which generally beat Wall Street forecasts. The company that owns Facebook and Instagram had expected earnings per share of $2.98, up from $2.91. Second-quarter revenue was $32 billion, compared with consensus estimates of $31.12 billion. Led by growth in digital advertising, Meta reported 11% year-over-year revenue growth in the second quarter, the first double-digit growth globally since late 2021.
Looking to the future, Meta Platforms is developing a smartphone version of its Threads text-based social networking platform. This can be seen as a direct counter attack on X (Twitter). The online version of Threads can act as another catalyst for META action.
Shopify (store)
Investors looking for a buyout candidate should keep an eye on e-commerce company (and Cathy Wood favorite) Shopify (NYSE: SHOP ).
The tech company's share price has fallen 18% since it reported a second-quarter net loss of $1.3 billion in early August. The latest loss was 8% higher than the $1.2 billion net loss recorded a year earlier. While the nearly 20% drop since the Q2 release was disappointing, SHOP stock is still up 64% year-to-date. Moreover, it has grown by 288% in the last five years.
Additionally, Shopify's big second-quarter loss was almost entirely attributable to restructuring costs. The company cut 20% of its workforce in the second quarter of this year and sold its logistics business.
The only silver lining in Q2 pressure was Shopify's revenue of $1.7 billion, up 30% from Q2 2022's $1.3 billion. As for Cathy Wood, she tends to buy more SHOP shares every time she dips and adds more shares to your various ETFs. .
Tesla (TSLA)
Electric car maker Tesla (NASDAQ: TSLA ) remains Wood's largest holding, accounting for 10% of the Ark Innovation ETF. Although he sold some of his TSLA stock in recent months, he remains heavily invested in the company and its CEO, Elon Musk. That game certainly paid off. Tesla's stock price is up 115% since January. While Tesla's stock remains volatile, Wood said he's in it for the long haul and sees electric vehicles as a major disruption to the auto industry.
Shares of TSLA are currently on the rise after falling more than 20% following the company's Q2 release. Tesla has angered investors with aggressive price cuts and a drive to gain global market share at the expense of profit margins.
The American automaker recently cut prices of its high-performance and long-range Model Y vehicles in China, its most competitive market. Despite concerns about this strategy, analysts point to future catalysts for Tesla, including the arrival of the company's long-awaited Cybertruck.
As of the date of publication, Joel Baglole had no position (direct or indirect) in the securities mentioned in this article. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com's posting guidelines.
Joel Bagole has been an economic journalist for 20 years. He spent five years as a reporter for The Wall Street Journal and has also written for The Washington Post and Toronto Star, as well as financial websites such as The Motley Fool and Investopedia.
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