It was a rough first half of the year for Cathie Wood. The co-founder, CEO, and investor at Ark Invest saw her family of aggressive growth exchange-traded funds lose badly to the market. But she's not throwing in the towel.
Wood publishes Ark's daily transactions, and she did a fair amount of buying on Monday to kick off the second half of 2024. Some of more intriguing names she purchased this week include Palantir(NYSE: PLTR), Archer Aviation(NYSE: ACHR), and Intellia (NASDAQ: NTLA). They're all existing positions. Let's take a closer look at some of her first purchases in the second half of this year.
1. Palantir
Most of Wood's largest holdings at Ark Invest are lagging the market this year, but Palantir isn't one of them. Shares of the software solutions provider for the intelligence community have soared 50% in 2024, more than quadrupling since the start of last year. It's currently the seventh largest holding across all of Ark's funds.
Many tech providers have seen their business slow lately, but year-over-year revenue growth at Palantir has been accelerating in each of its past three quarters. The midpoint of its earlier guidance for the quarter that ended over the weekend implies that top-line gains will pick up the pace for the fourth straight financial update. The market has been bidding up stocks that have a legitimate artificial intelligence (AI) catalyst, but Palantir is actually earning its upticks with a business that is picking up the pace.
Image source: Getty Images.
The big gains are exciting, but it also finds some Wall Street pros rethinking their enthusiasm. The last major analyst move happened less than two weeks ago, when Brian White at Moness Crespi downgraded the stock from neutral to sell on valuation concerns. He's generally concerned about AI and enterprise software stocks that have been moving higher despite an uninspiring earnings season. His $20 price target is 23% lower than where the stock was at Monday's close.
Palantir's latest guidance suggests that business will slow in the second half of this year, but momentum is on its side. One of the more encouraging trends at Palantir is how the company that once leaned almost entirely on government contract work is now thriving as it turns to Corporate America to pitch its high-tech solutions. It's working. The 40% jump it posted in commercial revenue in its latest quarter nearly doubled the 21% overall increase on the top line.
Valuations will be a concern for any stock that's a four-bagger over the past 18 months. However, don't overlook Palantir's improving fundamentals. This is more than just a play on hot market buzzwords.
2. Archer Aviation
One of Wood's purchases on Monday that isn't doing as well as Palantir this year is Archer Aviation. The stock has plummeted 44% in 2024, even though it did more than triple last year.
Wood owns a couple of companies specializing in next-gen short-distance air travel, and Archer is one of her biggest bets in this space. Archer offers electric vertical takeoff and landing (eVOTL) aircraft that it hopes will help get affluent clients around densely populated cities faster than conventional surface-hugging options.
Archer is a pre-revenue player that's naturally losing money as it scores potential lucrative partnership deals for its coming fleet of high-tech air taxis. Last month it announced plans for an air mobility network that will serve five key locations across the San Francisco area. Investors are hoping that once the fleet starts to take off, the shares will follow suit.
3. Intellia Therapeutics
Intellia Therapeutics can't seem to catch a break. Shares of the poorly performing gene-editing stock has declined 26% this year and is trading 36% lower since the start of last year. Intellia is developing some CRISPR-based therapies, and it even has a couple of them entering the critical third phase of clinical trials.
Intellia announced last week that its CFO would be stepping down. It's not a good look when the primary bean counter is leaving the company, but that doesn't mean something is amiss. Executives leave for many different reasons. As long as Intellia continues to deliver promising developments on her potential bar-raising therapies, you can't blame Wood 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.
