It’s been a rough first half for Cathie Wood. The co-founder, CEO and investor at Ark Invest has seen her family of aggressive growth exchange-traded funds lose a lot of money to the market. But she’s not giving up.
Wood is publishing Ark’s daily trades, and she made quite a few purchases Monday to kick off the second half of 2024. Some of the more intriguing names she bought this week include Palantir (NYSE: PLTR), Archer Aviation (NYSE: ACHR)And Intellia (NASDAQ: OUT). These are all existing positions. Let’s take a closer look at some of his early purchases in the second half of this year.
1. Palantir
Most of Wood’s largest holdings at Ark Invest have lagged the market this year, but Palantir isn’t one of them. Shares of the intelligence community software solutions provider are up 50% in 2024, more than quadrupling since the start of last year. It’s now the seventh-largest holding of any Ark fund.
Many tech vendors have seen their businesses slow lately, but Palantir’s year-over-year revenue growth has accelerated in each of its past three quarters. The midpoint of its prior guidance for the quarter that ended this weekend implies that revenue gains will accelerate for the fourth straight financial update. The market has been pushing up stocks that have legitimate artificial intelligence (AI) catalyst, but Palantir actually deserves its advances with activity that is accelerating the pace.
The big gains are exciting, but they’re also causing some Wall Street pros to dial back their enthusiasm. The last major analyst move came less than two weeks ago, when Moness Crespi’s Brian White downgraded the stock to sell from neutral on valuation concerns. He’s generally concerned about AI and enterprise software stocks that have rallied despite a lackluster earnings season. His $20 price target is 23% below where the stock was at Monday’s close.
Palantir’s latest forecast suggests that business will slow in the second half of this year, but momentum is on its side. One of the most encouraging trends at Palantir is how the company, which once relied almost entirely on government contracts, is now thriving by turning to large American companies to pitch its high-tech solutions. It’s working. The 40% jump in commercial revenue it posted in its most recent quarter nearly doubled the 21% increase in overall revenue.
Valuations will be a concern for any stock that is up 4% over the past 18 months. However, don’t overlook Palantir’s improving fundamentals. This is more than just a market buzzword.
2. Archer Aviation
One of Wood’s Monday buys that isn’t doing as well as Palantir this year is Archer Aviation. The stock is down 44% in 2024, even though it more than tripled last year.
Wood owns several companies specializing in next-generation short-haul air travel, and Archer is one of its biggest bets in that space. Archer offers electric vertical takeoff and landing (eVOTL) aircraft that it hopes will help wealthy customers get around densely populated cities faster than conventional fly-over options.
Archer is a player that has yet to turn a profit and is understandably losing money as it strikes potentially lucrative partnerships for its future fleet of high-tech air taxis. Last month, it announced plans to create an air mobility network that will serve five key locations in the San Francisco area. Investors are hoping that once the fleet starts taking off, the stock will follow suit.
3. Intellia Therapeutics
Intellia Therapeutics shows no sign of finding respite. The company’s stock is underperforming Gene editing stock The stock has fallen 26% this year and is trading 36% lower since the start of last year. Intellia is developing CRISPR-based therapies, and some of them are even entering the critical third phase of clinical trials.
Intellia announced last week that its CFO would be stepping down. It’s not great news that the company’s top accountant is leaving, but it doesn’t mean anything is wrong. Executives leave for a variety of reasons. As long as Intellia continues to deliver promising developments on its potentially game-changing therapies, Wood can’t be blamed for buying on the dip.
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Rick Munarriz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Intellia Therapeutics and Palantir Technologies. The Motley Fool has a disclosure policy.
3 Stocks Cathie Wood Just Bought to Get Back on Track in the Second Half of 2024 was originally published by The Motley Fool
