Cathie Wood's Bold Moves in the Tech Sector: Amazon Purchase Amid Tesla, Palantir, and Reddit Sales

On Thursday, Cathie Wood-led Ark Invest executed major trades involving notable companies such as Palantir Technologies Inc. (PLTR), Tesla Inc. (TSLA), Reddit Inc. (RDDT), and Amazon.com, Inc. (AMZN). These transactions stirred discussions in the investment community.

The Palantir Trade

Ark Invest decided to sell its shares in Palantir during a turbulent period for the firm. The company's stock experienced significant fluctuations, initially declining due to a downgrade from Jefferies, but it recovered after a partnership was announced with Amazon Web Services (AWS) and Anthropic.

Despite the downgrade by Jefferies analyst Brent Thill from Hold to Underperform due to valuation worries, Palantir's stock has surged over 220% this year. It also saw a notable 30% increase in the last week, mainly driven by high demand for artificial intelligence.

On Thursday, Ark sold 264,513 shares of Palantir through its ARK Innovation ETF (ARKK) and Ark Fintech Innovation ETF (ARKF), with the total transaction valued at $14.8 million based on a closing price of $55.88.

The Tesla Trade

In addition, Ark offloaded 85,019 shares of Tesla Inc. (TSLA). This sale is part of a recent trend where Wood has been reducing her holdings in Tesla. The latest sale, executed through ARKK, was valued at $25.24 million.

Ark Invest believes that Tesla’s forthcoming driverless ride-hailing service has the potential to tap into an $11 trillion market, undercutting existing competitors due to its low operating expenses. The service is expected to launch next year in Texas and California, starting with human drivers before transitioning to full autonomy as regulations permit.

The Reddit Trade

Ark's dealings with Reddit come at a time when the social media platform is gaining momentum, with its market cap recently surpassing that of Snap Inc. (SNAP) at $21.5 billion, boosted by a 12% increase on Election Day. This marks a significant milestone for Reddit, whose user base and revenue is much smaller compared to Snap.

Reddit’s rising prominence as a source for genuine information is also affecting Google’s stronghold in the internet search space. This trend was highlighted at a recent event organized by The Wall Street Journal, where a journalist noted that she frequently uses Google to search for information posted on Reddit.

On Thursday, Ark sold 62,389 shares of Reddit from its ARK Next Generation Internet ETF (ARKW), completing a transaction that amounted to $8.2 million. After the sale, Reddit’s shares closed 8.6% higher at $131.44.

The Amazon.com Trade

A noteworthy aspect of Ark Invest's recent activities is its purchase of Amazon shares. This decision comes at a time when several insiders within Amazon are unloading their stocks. For example, Jeff Bezos, Amazon’s executive chair, sold 1.07 million shares at $200.07 per share, netting around $213.8 million while still holding 926.41 million shares.

Other Amazon insiders, such as director Jonathan Rubinstein and Douglas Herrington, CEO of Worldwide Amazon Stores, have also sold off their shares recently, adding to the trend.

Through its ARKK fund, Ark Invest acquired 150,675 shares of Amazon in a transaction valued at $31.6 million, with Amazon’s stock closing Thursday at $210.16, up 1.5%.

Other Key Trades:

• Ark purchased shares of 10X Genomics Inc. (TXG) and sold shares of Moderna Inc. (MRNA).
• The fund increased its holdings in Illumina Inc. (ILMN), ABSCI Corp (ABSI), and Guardant Health Inc. (GH), while selling chunks of Unity Software Inc. (U), Sofi Technologies Inc. (SOFI), and Repare Therapeutics Inc. (RPTX).

This article presents an overview of Ark Invest’s recent strategic adjustments within the technology sector, reflecting Cathie Wood's trading philosophy as she navigates the dynamic market conditions.

Cathie, Wood, Invest, ETFs, Stocks