It’s been a busier week than usual for Cathie Wood. Ark Investment Architects – Check it out, ark-itect – pulled the trigger on the trading floor. The founder, CEO and leading stock picker of Ark Invest is looking to rebound from a rough start to 2024.
Wood adds to her existing position Palantir (NYSE:PLTR), interest (NYSE:PINS)and Spotify (NYSE: Spot) Last week. Tuesday. Let’s take a closer look at the stock she just bought.
Many of Wood’s top holdings have been losing ground to the market, but Palantir has been outperforming. Shares of the intelligence community software developer have soared 42% this year after more than doubling in 2023. Palantir shares have now more than tripled since the beginning of last year.
The stock’s surge and Wood’s increased position make Palantir one of the 15 largest holdings across all Ark Invest positions. Financial results are well received.
Palantir’s results last week weren’t great. Fourth-quarter revenue grew 20%, better than market expectations of 18%. Adjusted earnings of $0.08 per share were also a slight lead.However, Palantir’s appeal as a game AI Despite last year’s share price blowout, AI still makes it a winner in 2024.
Palantir received ratings from two former bears last week after reporting fourth-quarter results last week. Citibank Upgraded the stock to neutral from sell, doubling the price target to $20 in the process. The momentum in Palantir’s commercial business (still a fifth of the revenue mix but growing rapidly) makes Palantir more than just a private company. Jefferies also moved from Underperform to Hold, raising its price target on the stock to $22. The stock is already trading above both of these revised targets, but it’s always refreshing to see the shorts start to taper off.
Wood’s timing on Pinterest wasn’t as good as it was on Palantir or Spotify. On Thursday, just before the visual discovery engine operator releases quarterly results after the closing bell, she increased her holdings significantly. Pinterest shares fell 9% on Friday, and she bought more shares later.
Fourth-quarter revenue grew 12%, marking the fourth consecutive time it reported accelerated revenue growth. Its guidance calls for a 15% target to extend accelerated revenue growth, although both increases were below Wall Street pros. Adjusted earnings beat expectations, with average revenue per user growing again after a reversal in the first half of last year.
The stock’s current price-to-earnings ratio is 28 times this year’s new year’s expected price-to-earnings ratio, while next year’s target price-to-earnings ratio is only 21 times. If its user base continues to expand and revenue growth continues to accelerate, the stock should rebound.
Wood added some Spotify stock earlier this week, marking her first major acquisition of the popular streaming service in nearly two months. This is smart timing. Spotify is rising this earnings season, a day after it released a blowout report. The stock moved higher in 2019. six of the last seven trading days.
Revenue rose 20% in the latest quarter on a constant currency basis, accelerating from the 17% year-over-year growth reported three months ago. Spotify’s number of active users has grown 23% over the past year to 602 million. There are free ad-supported listeners, but paid accounts grew 15% last year to 236 million.
Spotify has emerged as a top streaming service stock for music enthusiasts after several quarters of lower-than-expected profits. Wood likes what she’s hearing about Spotify.
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Citigroup is the advertising partner of The Ascent, a Motley Fool company. Rick Munariz The Motley Fool has no position in any of the stocks mentioned. The Motley Fool owns and recommends Palantir Technologies, Pinterest and Spotify Technology. Motley Fool has disclosure policy.
3 stocks Cathie Wood bought last week Originally published by The Motley Fool