In this article, we will take a look at the 10 tech stocks to sell now according to Cathie Wood. To see more such companies, go directly to 5 Tech Stocks To Sell Now According to Cathie Wood.
Cathie Wood has made a roaring comeback in 2023 after suffering huge losses and criticism in 2022. Cathie Wood’s ARK Innovation ETF (ARKK) is up about 34% year to date through February 10. While only time would tell whether or not ARK’s outperformance would continue, Cathie Wood is making sure the market is aware of her strong comeback as she recently said that ARK provides long-term exposure to innovation better than any other benchmarks in the market. Wood made headlines by announcing, “We are the new NADAQ.”
Cathie Wood deserves the credit for her persistence and unwavering stance on innovation stocks and growth. She recently reiterated that she believes Bitcoin value will exceed $1 million in the next decade. Her top holdings still feature major tech stocks like Tesla, Zoom, UiPath and Shopify despite huge losses these stocks posted in 2022. The launch of ChatGPT and the AI wars that ensued are also giving a boost to Cathie Wood’s predictions about innovation and futuristic sectors like artificial intelligence, molecular diagnostics and autonomous cars.
Is the outperformance of Cathie Wood’s portfolio because of the short-term market rally? Will ARK investors have to wait for five or ten more years to reap the rewards of their patience and investments?
Many believe the current market rally won’t last for long. The latest jobs report which showed the strength of the labor market is already dashing hopes of market bulls as analysts believe the Federal Reserve now has more impetus to continue on its rate-hike spree despite signs that inflation is slowing.
One of the notable market experts advising caution is JPMorgan Chase’s Marko Kolanovic who recently advised investors to use the current market rally as an opportunity to cut their exposure. The analyst said that the disinflationary process in the US could be “transitionary.”
Kolanovic thinks strengths in the labor market could kill the possibility of soft landing. In such situation the Federal Reserve would try to tame inflation while the economy would keep growing.
“If that doesn’t come into fruition, it will result in a mean-reversion across this year’s equity winners,” Kolanovic said.
Cathie Wood of ARK Investment Management
Our Methodology
For this article we studied Cathie Wood’s ARK Investment Management’s Q4 portfolio and picked 10 tech stocks in which the hedge fund cut its exposure during the period. Some of these stocks were sold entirely by the fund, while others saw a massive stake cut by ARK.
Tech Stocks To Sell Now According to Cathie Wood
10. Proto Labs, Inc. (NYSE:PRLB)
Number of Hedge Fund Holders: 17
Proto Labs, Inc. (NYSE:PRLB) is a Minnesota-based prototyping and 3D printing company. Proto Labs, Inc. (NYSE:PRLB) has gained about 40% in 2023 through February 10. Cathie Wood’s hedge fund cut its stake in Proto Labs, Inc. (NYSE:PRLB) by 37% during the fourth quarter of 2022. The fund still owns about 359,000 shares in Proto Labs, Inc. (NYSE:PRLB) as of the end of 2022.
Proto Labs, Inc. (NYSE:PRLB) recently posted its fourth quarter results which easily surpassed analyst estimates. Proto Labs, Inc. (NYSE:PRLB) also increased its share buyback program to $250 million. During the fourth quarter, Proto Labs, Inc. (NYSE:PRLB)’s adjusted EPS came in at $0.26, topping consensus by 5 cents. Revenue in the period came in at $115.6 million, $5.47 million more than estimates.
A total of 17 hedge funds tracked by Insider Monkey reported owning stakes in Proto Labs, Inc. (NYSE:PRLB) as of the end of the third quarter of 2022. The total value of these stakes was $64 million.
9. Materialise NV (NASDAQ:MTLS)
Number of Hedge Fund Holders: 4
Materialise NV (NASDAQ:MTLS) is a Belgian 3D printing company. During the fourth quarter of 2022, Cathie Wood’s ARK Investment cut its stake in Materialise NV (NASDAQ:MTLS) by 39%. Still, the hedge fund owns about 3.5 million shares of Materialise NV (NASDAQ:MTLS) as of the end of the fourth quarter of 2022. Over the past 12 months the stock has lost about 52% in value. In October, Materialise NV (NASDAQ:MTLS) posted third quarter results. GAAP EPS in the quarter came in at $0.02, missing estimates by $0.01. Revenue also fell 6% on a YoY basis and totaled $56.82 million. This figure nonetheless beat consensus estimate by $0.23 million.
Materialise NV (NASDAQ:MTLS) said that for full-year 2022 its revenues will be at least 10% higher than in 2021.
Jim Simons’ Renaissance Technologies is also a notable stakeholder of Materialise NV (NASDAQ:MTLS) as of the end of the third quarter of 2022. The hedge fund had a stake worth about $3.3 million in Materialise NV (NASDAQ:MTLS).
8. Xometry, Inc. (NASDAQ:XMTR)
Number of Hedge Fund Holders: 24
Xometry, Inc. (NASDAQ:XMTR) is a Maryland-based AI-enabled marketplace for on-demand manufacturing. ARK Investment Management cut its stake in Xometry, Inc. (NASDAQ:XMTR) by 43% during the fourth quarter of 2022. The hedge fund still owns about 99,000 shares of Xometry, Inc. (NASDAQ:XMTR). In November, Xometry, Inc. (NASDAQ:XMTR) posted its third-quarter results. Adjusted EPS in the quarter came in at -$0.11, beating estimates by $0.13. Revenue in the quarter jumped a whopping 82% to reach $103.57 million, beating estimates by $0.2 million. For the fourth quarter, Xometry, Inc. (NASDAQ:XMTR) said it was expecting revenue in the range of $104 million to $106 million, versus the consensus estimate of $116.23 million.
Insider Monkey’s database of 920 hedge funds shows that 24 hedge funds had stakes in Xometry, Inc. (NASDAQ:XMTR) at the end of the third quarter of 2022. This was significantly up from 16 hedge funds which had stakes in Xometry, Inc. (NASDAQ:XMTR) in the previous quarter. This shows that hedge fund sentiment for Xometry, Inc. (NASDAQ:XMTR) is positive.
7. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 89
Cathie Wood’s hedge fund cut its stake in NVIDIA Corporation (NASDAQ:NVDA) by 63% during the fourth quarter of 2022. The hedge fund entered the first quarter of 2023 with about 523,181 shares of NVIDIA Corporation (NASDAQ:NVDA). NVIDIA Corporation (NASDAQ:NVDA) shares have gained about 47% year to date in 2023 through February 10. NVIDIA Corporation (NASDAQ:NVDA) is one of the leading tech gainers in 2023.
NVIDIA Corporation (NASDAQ:NVDA) is also popular among hedge funds. A total of 89 hedge funds tracked by Insider Monkey reported owning shares of NVIDIA Corporation (NASDAQ:NVDA) at the end of the third quarter of 2022. The net worth of these stakes was about $43 billion.
O’keefe Stevens Advisory made the following comment about NVIDIA Corporation (NASDAQ:NVDA) in its Q4 2022 investor letter:
“The market and our portfolios had a challenging year as interest rates rose, and deteriorating fundamentals cut our largest position, NVIDIA Corporation (NASDAQ:NVDA), in half. Since our initial purchase in 2013, NVDA has seen its stock decline 50% one other time, back in 2018. The best-performing businesses and stocks do not go up and to the right. Mr. Market gets moody, and even one of the highest quality companies in the world is not immune. Drawdowns of this magnitude are challenging to stomach, even though the stock is up 50x in less than ten years. While we consider ourselves old school value investors, we continue to hold this fantastic company even though, optically, it does not appear cheap. Our confidence in Jensen remains, and while gaming is no longer in hyper-growth mode, the Data Center segment continues to grow. AI, Automotive, and other small but rapidly growing industries are the next leg of the story. Chris Mayer discusses the position in greater detail with commentary from our CIO, Peter O’Keefe. Click here to read the article.”
6. Zillow Group, Inc. (NASDAQ:Z)
Number of Hedge Fund Holders: 58
Zillow Group, Inc. (NASDAQ:Z) is a US-based internet marketplace for real estate. Over the past 12 months, Zillow Group, Inc. (NASDAQ:Z) has lost about 12%. However, Zillow Group, Inc. (NASDAQ:Z) shares rebounded in 2023 and are up about 28% in the year through February 10. Cathie Wood’s hedge fund reduced its stake in Zillow Group, Inc. (NASDAQ:Z) by 88% during the fourth quarter of 2022. The hedge fund entered 2023 with over 100,000 shares of Zillow Group, Inc. (NASDAQ:Z).
As of the end of the third quarter of 2022, 58 hedge funds had stakes in Zillow Group, Inc. (NASDAQ:Z), according to Insider Monkey’s database of 920 hedge funds. The total value of these stakes was about $702 million.
In January, BofA Securities analyst Curtis Nagle double-upgraded Zillow Group, Inc. (NASDAQ:Z). The analyst is hopeful that growth can return to double digits by 2024.
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Disclosure: None. 10 Tech Stocks To Sell Now According to Cathie Wood is originally published on Insider Monkey.
