It was a busier than usual week for Cathie Wood. The Ark Invest architect — check that, Ark-itect — had an itchy trigger finger on the trading floor. The founder, CEO, and primary stock picker at Ark Invest is hoping to bounce back from a rough start in 2024.
Wood added to her existing positions in Palantir (NYSE: PLTR), Pinterest (NYSE: PINS), and Spotify (NYSE: SPOT) last week. on Tuesday. Let’s take a closer look at the stocks she just bought.
A lot of Wood’s top holdings have been losing to the market, but Palantir has been a standout. Shares of the intelligence community software developer have soared 42% this year, after more than doubling in 2023. Palantir stock has now more than tripled since the start of last year.
The stock’s surge and Wood’s increasing position have Palantir as one of the 15 largest holdings across all of Ark Invest’s positions. It came through last week with well-received financial results.
It wasn’t much of a beat for Palantir last week. A 20% revenue increase in the fourth quarter was better than the 18% gain the market was expecting. The $0.08 a share in adjusted earnings was also a marginal beat. However, Palantir’s appeal as a play on artificial intelligence (AI), has made it a winner in 2024 even after a blowout stock chart last year.
Palantir received a pair of upgrades last week from a pair of now former bears following last week’s fourth-quarter results. Citi upgraded the shares from sell to neutral, doubling its price target to $20 in the process. Growing momentum in Palantir’s commercial business — still a fifth of the revenue mix, but growing quickly — makes Palantir more than just a private-sector play. Jefferies also went from underperform to hold, lifting its price target on the shares to $22. The stock is already higher than both of those revised goals, but it’s always refreshing to see the bears start to thin out.
Wood’s timing on Pinterest wasn’t as good as it was with Palantir or Spotify. She added shares aggressively on Thursday, just before the visual discovery engine operator posted quarterly results after the market closed. Pinterest stock slid 9% lower on Friday, and she bought more shares then, too.
Revenue rose 12% in the fourth quarter, its fourth consecutive report of accelerating top-line growth. Its guidance calls for stretching its streak of accelerating revenue with a 15% target, though both jumps fall shy of where the Wall Street pros were perched. Adjusted earnings topped estimates, and average revenue per user is growing again after driving in reverse through the first half of last year.
The stock is now trading at 28 times this new year’s projected earnings and just 21 times next year’s target. It should bounce back if its user base keeps widening and its revenue growth continues to accelerate.
Wood added some Spotify shares early in the week, her first major purchase of the popular streaming service operator in nearly two months. It was smart timing. Spotify rose tall this earnings season with a blowout report the next day. The shares have moved higher in six of the past seven trading days.
Revenue rose 20% on a constant-currency basis in its latest quarter, accelerating from a 17% year-over-year jump it posted three months earlier. Spotify’s number of active users has risen 23% over the past year to 602 million. Many of them are free ad-supported listeners, but paying accounts have climbed 15% to 236 million over the past year.
After back-to-back quarters of trouncing bottom-line expectations, Spotify has established itself as the top streaming service stock for audiophiles. Wood likes what she’s hearing when it comes to Spotify.
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Citigroup is an advertising partner of The Ascent, a Motley Fool company. Rick Munarriz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Palantir Technologies, Pinterest, and Spotify Technology. The Motley Fool has a disclosure policy.
3 Stocks Cathie Wood Bought Last Week was originally published by The Motley Fool