In this article, we will take a look at the 11 tech stocks to sell now according to Cathie Wood. To skip our analysis of the recent trends, and market activity, you can go directly to see the 5 Tech Stocks to Sell Now According to Cathie Wood.
Cathie Wood is a well-known investor and founder of ARK Investment Management, LLC, an asset management company focused on thematic investing. It focuses on investments in “technologically enabled innovation that cuts across economic sectors and changes the way our world works.” The firm currently invests across themes including Autonomous Technology, Robotics, Artificial Intelligence (AI), Blockchain Technology, Multi-Omics, Space Exploration, and Energy Storage.
Cathie Wood’s ARK Investment Management, LLC provides management and supervisory services to several funds including ARK Genomic Revolution ETF, ARK Autonomous Technology & Robotics ETF, ARK Innovation ETF, and ARK Venture Fund, among others. Cathie Wood has made a significant recovery so far this year following a miserable year, especially for growth stocks, in 2022. Its flagship ETF, the ARK Innovation ETF (ARKK), was up 41.37%, as of September 15.
The portfolio of ARK Investment Management, LLC is dominated by leading technology companies with the top five holdings accounting for nearly 30% of the total portfolio value, as of June 30, 2023. Its top holdings include Tesla, Coinbase, UiPath, Roku, and Block. Cathie Wood has been bullish for Tesla, Inc. for a long time and remains optimistic about a positive future for the company, evident from the 8.39% share of Tesla in the 13F portfolio of ARK Investment Management, LLC.
In an interview at Barron’s in August, Cathie Wood talked about the potential to benefit from Artificial Intelligence at companies other than Nvidia. She said:
“Tesla (TSLA) is the biggest AI opportunity out there. It is the biggest artificial intelligence project in the world when it comes to autonomous taxi platforms. And it is selling for roughly, seven times, maybe it’s six times revenues now. So that’s a very good example and even, we think, the best example. But other software plays would include Twilio (TWLO), which is selling at two to three times and Zoom (ZM), which is selling at roughly three times sales. And these companies have either very high gross margins like Zoom, 80%, or they have low gross margins now, like Tesla does in the 20s, but they will be rising because of the SAS-like model that is evolving for Tesla. They will rise from the 20s into what we believe is the 50s and 60s, [which is] not at all expected out there.”
Markets are poised for the much-awaited policy decision for rate hikes by the United States Federal Reserve, expected to be announced on September 20. The latest jobs report shows a continued slowdown in the labor market which suggests the possibility of interest rates to be maintained at the same level in the upcoming meeting. You can read more about this in our recently published article: Jim Cramer Recommends Selling These 12 Stocks.
Cathie Wood of ARK Investment Management
For this article we studied Cathie Wood’s ARK Investment Management’s Q2 2023 portfolio and picked 11 tech stocks in which the hedge fund cut its exposure during the period. The stocks have been ranked based on the percentage of stake sold by ARK Investment Management during the quarter as compared to the previously disclosed ownership position.
11. Playtika Holding Corp. (NASDAQ:PLTK)
Percentage of Stake Sold by ARK Investment Management in Q2 2023: 27%
Number of Hedge Fund Holders: 21
Herzliya, Israel-based Playtika Holding Corp. (NASDAQ:PLTK) is a digital entertainment company specializing in the development and publication of mobile games. Its portfolio included multiple casual online games with more than 28 million monthly active users.
On August 8, Playtika Holding Corp. (NASDAQ:PLTK) released its financial results for Q2 2023. Its revenue declined by 3% y-o-y to $643 million while net income more than doubled y-o-y to reach $76 million. EPS for the quarter, at $0.21, missed the consensus estimates by $0.04.
Cathie Wood’s ARK Investment Management sold 27% of its stake in Playtika Holding Corp. (NASDAQ:PLTK) during the second quarter of 2023. The fund still owns 173,417 shares of the company which were valued at $2.0 million.
10. Mercadolibre, Inc. (NASDAQ:MELI)
Percentage of Stake Sold by ARK Investment Management in Q2 2023: 27%
Number of Hedge Fund Holders: 77
Founded in 1999, Buenos Aires, Argentina-based Mercadolibre, Inc. (NASDAQ:MELI) is Latin America’s leading e-commerce technology company operating through its primary platforms, MercadoLibre.com and MercadoPago.com. It provides solutions to individuals and companies buying, selling, advertising, and paying for goods online.
As of Q2 2023, Cathie Wood’s ARK Investment Management owned 43,594 shares of Mercadolibre, Inc. (NASDAQ:MELI), 27% less than the number of shares owned in the previous quarter, valued at nearly $52 million. Shares of the company, valued at more than $3.3 billion, were held by 77 prominent hedge funds according to Insider Monkey data.
On August 9, Goldman Sachse increased the price target for Mercadolibre, Inc. (NASDAQ:MELI) shares from $1910 to $2180 and maintained a ‘Buy’ rating for the shares.
9. Cellebrite Di Ltd. (NASDAQ:CLBT)
Percentage of Stake Sold by ARK Investment Management in Q2 2023: 28%
Number of Hedge Fund Holders: 22
Petah Tikva, Israel-based Cellebrite Di Ltd. (NASDAQ:CLBT) offers a digital intelligence platform legally sanctioned investigations that allows users to collect, review, analyze, and manage digital data across the investigative lifecycle.
On August 8, Cellebrite Di Ltd. (NASDAQ:CLBT) released its financial results for Q2 2023. Its revenue increased by 23% y-o-y to $77 million, while it generated a net loss of $32 million, compared to a net income of $33 million. At -$0.17, its actual EPS for the quarter missed consensus estimates by $0.17.
ARK Investment Management sold 28% of its stake in Cellebrite Di Ltd. (NASDAQ:CLBT) during the second quarter which brought its ownership to 363,604 shares. Scott Stewart Miller’s Greenhaven Road Investment Management was the largest hedge fund shareholder with ownership of 3.5 million shares, as of June 30.
8. NVIDIA Corporation (NASDAQ:NVDA)
Percentage of Stake Sold by ARK Investment Management in Q2 2023: 29%
Number of Hedge Fund Holders: 175
Founded in 1993, California-based NVIDIA Corporation (NASDAQ:NVDA) is a leading technology company focused on the design and manufacturing of accelerated computing hardware and software products. Its core businesses comprise of Gaming, Data Center, Professional Visualization, and Automotive, with Gaming and Data Center making up for more than 80% of its revenues.
Analysts are bullish on the future prospects of Nvidia Corporation (NASDAQ:NVDA) with a significant potential of top and bottom line growth for the company with the increasing demand for its products. On August 24, Deutsche Bank raised its price target on the shares of the chipmaker to $560 from $440 while Truist Securities raised the target price to $668 from $545.
Hedge funds are also bullish about NVIDIA Corporation (NASDAQ:NVDA) shares as the number of hedge funds that own its shares reached 175 in Q2 2023, as compared to 132 in the previous quarter. These hedge funds together held shares worth $26.0 billion, according to Insider Monkey data.
7. Altair Engineering Inc. (NASDAQ:ALTR)
Percentage of Stake Sold by ARK Investment Management in Q2 2023: 30%
Number of Hedge Fund Holders: 16
Troy, Michigan-based Altair Engineering Inc. (NASDAQ:ALTR) is a global technology company that provides software and cloud solutions in the areas of data analytics, product development, and high-performance computing.
On August 3, Altair Engineering Inc. (NASDAQ:ALTR) released its financial results for Q2 2023. Its revenue increased by 6% y-o-y to $141 million while net loss shrunk by 34% y-o-y to $22 million. At -$0.28, its EPS missed the consensus estimates by $0.10.
Following the earnings release, Rosenblatt reiterated a ‘Buy’ rating for the shares of Altair Engineering Inc. (NASDAQ:ALTR) and raised the price target on its shares to $74 from $70.
6. Spotify Technology S.A. (NYSE:SPOT)
Percentage of Stake Sold by ARK Investment Management in Q2 2023: 33%
Number of Hedge Fund Holders: 57
Founded in 2006, Stockholm, Sweden-based Spotify Technology S.A. (NYSE:SPOT) is an audio streaming and media services provider that allows listeners to discover, manage and enjoy over 100 million tracks, 5 million podcasts titles, and 350,000 audiobooks on its platform.
On July 25, Spotify Technology S.A. (NYSE:SPOT) released its financial results for Q2 2023. The company managed net additions of 36 million Monthly Active Users and 10 million premium subscribers to its platform during the quarter which brought the total figures to 551 million and 220 million, respectively.
As of Q2 2023, Spotify Technology S.A. (NYSE:SPOT) shares were owned by 57 prominent hedge funds tracked by Insider Monkey, with the total value of shares held by these hedge funds valued at $1.9 billion. Karthik Sarma’s SRS Investment Management was its largest hedge fund shareholder with ownership of 2.2 million shares valued at $354 million.
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Disclosure: None. 11 Tech Stocks to Sell Now According to Cathie Wood is originally published on Insider Monkey.