In this article, we will take a look at the 10 Tech Stocks to Sell Now According to Cathie Wood.
In an industry known for hedge fund managers who focus on unique strategies, including quantitative trading and value stocks, Cathie Wood and her hedge fund ARK Investment Management set themselves apart by purely focused on buying shares in emerging, innovative companies in fields such as AI, Blockchain Technology, Multi-Omics, Space Exploration, and Energy Storage. The fund saw one of its best years since its launch in 2017, with an impressive 87.4% gain driven by a 1300% increase in Grayscale Bitcoin Trust. This performance occurred while the price of Bitcoin hit a record high of $20,000.
Although her funds have gained recognition for their strategies, they have also had a range of outcomes, with some analysts describing them as rollercoaster rides. While creative, market analysts highlight a significant issue with the hedge fund manager’s approach: most companies she supports are fairly volatile and come with highly correlated returns. In addition, Wood’s portfolio is extremely concentrated, posing a significant risk as gains and losses are magnified. As an illustration, Wood’s flagship ARK Innovation ETF, with $6.27 billion under management marked a three-year annualized return of -15.64% and a five-year return of 3.05%. The S&P 500, by contrast, raked in annualized returns of 9.98% over three years and 14.65% over five. According to Morningstar Financial, the ARK Innovation ETF lost 29.9% of its value by the end of the first quarter of 2022. The slide came after the flagship fund saw a 24% drop in 2021, highlighting the risk associated with Wood’s full-on growth strategy.
Unwavering Confidence in Bitcoin
In an interview with Bloomberg Markets, Wood predicted that Bitcoin would surpass the $1 million mark by the end of the decade. She ascribed the cryptocurrency’s increasing value to both growing institutional and its limited supply of only 21 million coins. According to the ARK’s manager, BTC has already crossed $108,000 in 2024 and is expected to rise further in the upcoming years. She also highlighted that, in contrast to more conventional assets like gold, Bitcoin is resistant to inflationary pressures. Moreover, Wood emphasized that institutional adoption—especially via Bitcoin ETFs—is increasing the allure of BTC and promoting a wider understanding of its place within the international financial system.
Additionally, Wood has predicted a surge in startup merger & acquisitions (M&A) under the new Trump administration, which has already taken a number of pro-crypto steps. She cited the expected changes to the Federal Trade Commision (FTC) regulations that may lower regulatory barriers and foster an environment of that is more welcome to private sector transactions. According to Wood:
“Regulatory barriers have been a significant obstacle for M&A activity, but that is likely to change.”
She went on to say that these changes might open up new liquidity opportunities for venture-backed companies. As companies regain the ability to make acquisitions without stringent regulation, Wood added, there may be a spike in market activity. For startups looking towards growth or exit opportunities in an economic environment, this would be crucial.
In any case, Cathie Wood is one of the most interesting hedge fund managers to observe in the industry, and much like her peers, she has made significant moves in the third quarter of 2024. For now, however, we will look at the stocks that she has chosen to part ways with.
Cathie Wood of ARK Investment Management
Our Methodology
We scanned Cathie Wood’s ARK portfolio for Q3 2024 and selected the technology stocks where she discarded her stake by at least 30% or more. We have arranged the list in ascending order of the percentage of stake discarded.
For these stocks, we also mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10. The Trade Desk, Inc. (NASDAQ:TTD)
Percentage of stake sold by ARK Invest in Q3: 31%
ARK Investment Management’s Q3 Stake Value: $138.7 million
Number of Hedge Fund Holders: 42
One of the top providers of advertising technology, The Trade Desk, Inc. (NASDAQ:TTD) focuses on providing digital marketers with advertising solutions. It provides a cloud-based platform and self-service, transparent software that allows advertisers to design, manage, and optimize their digital ad campaigns across multiple platforms and channels.
On January 15, BMO Capital Markets maintained an Outperform rating on TTD shares and increased the stock’s price target from $125 to $160. BMO analysts cited expert checks that indicated a strong performance in the company’s fourth-quarter 2024 CTV advertising, which is expected to boost Trade Desk’s results. Moreover, BMO is certain that the company is in a strong position to benefit from the anticipated $150 billion shift from linear to CTV advertising.
Recently, The Trade Desk, Inc. (NASDAQ:TTD) announced that it had acquired digital advertising company Sincera. In addition to giving advertisers access to integrated tools, this move aims to improve programmatic advertising capabilities. The company has also maintained an impressive gross profit margin of 81%, as well as a strong revenue growth of 26% over the past year.
Parnassus Investments stated the following regarding The Trade Desk Inc. (NASDAQ:TTD) in its “Parnassus Mid Cap Fund” second quarter 2024 investor letter:
“The Trade Desk Inc. (NASDAQ:TTD), a cloud-based media-buying platform for advertisement purchasers, reported a strong quarter based on increasing demand for connected TVs. The stock received another boost after the company announced a partnership with Netflix, which should accelerate Trade Desk’s growth.”
9. Camtek Ltd. (NASDAQ:CAMT)
Percentage of stake sold by ARK Invest in Q3: 34%
ARK Investment Management’s Q3 Stake Value: $1.45 million
Number of Hedge Fund Holders: 27
Camtek Ltd. (NASDAQ:CAMT) develops, manufactures, and sells inspection and metrology equipment for various segments of the semiconductor industry, such as advanced interconnect packaging, memory, image sensors, and radio frequency. Cathie Wood reduced her stake in the company by 34% in the third quarter of 2024.
Northland reaffirmed its Outperform rating on Camtek Ltd. (NASDAQ:CAMT) on January 7, with a price target of $120. The company was named a Top Pick by the firm’s analysts for the calendar year 2025, highlighting its potential in the face of growing changing industry trends. Similarly, Stifel reaffirmed its Buy rating on CAMT shares, with a consistent price target of $105, citing several positive indicators, including improved backlog visibility in China and the strength of certain AI packaging customers.
The company reported record revenue of $112 million for the third quarter of 2024, representing a 40% increase from the same period last year. High-performance computing (HPC) products, fueled by demand for GenAI, accounted for half of this revenue. In addition, Camtek Ltd. (NASDAQ:CAMT) is also looking forward to the launch of a new advanced packaging system SEMICON Korea in early 2025. On the other hand, the company expects some decline in revenue from China and potential customer qualification issues that could potentially impact growth.
8. Moog Inc. (NYSE:MOG)
Percentage of stake sold by ARK Invest in Q3: 36%
ARK Investment Management’s Q3 Stake Value: $1.52 million
Number of Hedge Fund Holders: 17
Moog Inc. (NYSE:MOG) is an American designer and manufacturer of electric, electro-hydraulic and hydraulic motion systems for use in aerospace, defense, industrial, and medical devices. The company operates in four segments: aircraft controls, space and defense controls, industrial controls, and components.
As part of a broader research note previewing the Aerospace & Defense industry in 2025, Truist analyst Michael Ciarmoli raised Moog’s price target to $237 from $224 and maintained a Buy rating on the shares. According to the analyst, the new year feels like “groundhog day”, with 2024 investors optimistic about an aero OEM production recovery but pessimistic about the aftermarket rally. The firm adds that while aircraft production is expected to increase in 2025 from an easy comp, planned production rate increases are not materializing as fast as expected.
Moog Inc. (NYSE:MOG) reported strong Q4 2024 results, with net sales increasing 5% to $917 million and full-year sales climbing 9% to $3.609 billion. Q4 operating margin fell to 9.1% to 10.1%, while adjusted operating margin remained steady at 12.5%. Military aircraft sales increased by 17% to $216 million, while space and defense sales rose 9% to $263 million. For Fiscal 2025, the company expects net sales of $3.7 billion, an operating margin of 13%, and diluted earnings per share of $8.20.
7. Unity Software Inc. (NYSE:U)
Percentage of stake sold by ARK Invest in Q3: 42%
ARK Investment Management’s Q3 Stake Value: $150.7 million
Number of Hedge Fund Holders: 35
Unity Software Inc. (NYSE:U) offers a game engine that lets users make interactive simulations, 2D games, and 3D games. The Unity platform provides a suite of software tools for producing, executing, and making money off of real-time content for smartphones, tablets, PCs, gaming consoles, and augmented reality and virtual reality devices. The company stands out from competitors due to its end-to-end offerings, which account for 1.1 million active users and 3.7 billion downloads monthly.
Unity Software Inc. (NYSE:U) reported a mixed third quarter back in November, with revenue surpassing projections but earnings falling short of expectations. The company missed analyst’s earnings forecasts by $0.14 with an adjusted loss per share of $0.31. However, revenue for the quarter came in at $446.52 million, exceeding forecasts of $428.42 million. For the fourth quarter, Unity Software Inc. (NYSE:U) anticipates revenue to be between $422 million and $427 million, with the midpoint coming in just above analyst estimates of $424.9 million.
6. Intuit Inc. (NASDAQ:INTU)
Percentage of stake sold by ARK Invest in Q3: 47%
ARK Investment Management’s Q3 Stake Value: $14.5 million
Number of Hedge Fund Holders: 87
A global financial technology platform, Intuit Inc. (NASDAQ:INTU) enables both individuals and corporations to reach their financial objectives. Among its products are Mailchimp for email marketing, QuickBooks for business accounting, Credit Karma for financial management, and TurboTax for tax preparation.
With revenue of $3.2 billion, or roughly 17% year-over-year growth, Intuit Inc. (NASDAQ:INTU) showed that the company is resilient to macroeconomic challenges in Q4 2024. Looking ahead, the company expects its overall revenue to grow about 12% annually, which reflects a balanced approach across all of its segments.
Intuit Inc. (NASDAQ:INTU) recently expanded its partnership with leading productivity software provider GetBusy plc. The collaboration adds Intuit ProConnect Tax to the suite of products that integrate with GetBusy’s SmartVault, providing a co-branded document management and workflow solution exclusive to ProConnect Tax users.
Parnassus Growth Equity Fund stated the following regarding Intuit Inc. (NASDAQ:INTU) in its Q3 2024 investor letter:
“Intuit Inc. (NASDAQ:INTU) shares fell despite the financial software company posting strong quarterly results. The company’s pricing-dependent long-term guidance concerned investors. However, we continue to believe Intuit’s customer growth and relevant platform will sustain its wide moat and long growth runway.”
5. Vuzix Corporation (NASDAQ:VUZI)
Percentage of stake sold by ARK Invest in Q3: 100%
ARK Investment Management’s Q3 Stake Value: $291
Number of Hedge Fund Holders: 5
Vuzix Corporation (NASDAQ:VUZI) designs and manufactures a variety of innovative consumer electronics products, including smart glasses and augmented reality technologies. These products are used in a number of markets, including enterprise, defense, and healthcare. With its ground-breaking waveguide technology, essential to the development of AI-driven wearables, Vuzix Corporation (NASDAQ:VUZI) is becoming a major force in the smart glasses market.
Vuzix Corporation (NASDAQ:VUZI) reported a 36% decrease in total revenue for Q3 2024, dropping to $1.4 billion. This decline was primarily due to a significant drop in smart glass sales and engineering services revenue, which resulted in a net loss of $9.2 million. Despite these setbacks, the company managed to form a strategic partnership with Quanta Computer, including a $20 million investment, and announced the development of the Vuzix Z100 smart glasses. Additionally, Vuzix Corporation (NASDAQ:VUZI) announced a significant contract in late November 2024 to supply customized waveguides for use in heads-up displays to an unnamed U.S. aerospace and defense company.
4. Oddity Tech Ltd. (NASDAQ:ODD)
Percentage of stake sold by ARK Invest in Q3: 100%
ARK Investment Management’s Q3 Stake Value: $0
Number of Hedge Fund Holders: 18
Oddity Tech Ltd. (NASDAQ:ODD) is a consumer technology company that builds digital-first brands for the wellness and beauty sectors, both domestically and abroad. Under the SpoiledChild and IL MAKIAGE brands, the company offers skin, hair, and beauty products. The company also runs a biotechnology center called ODDITY LABS to create various ingredients for its products.
Goldman Sachs began coverage of Oddity Tech Ltd. (NASDAQ:ODD) shares earlier in December, assigning a 12-month price target of $48 and setting a Neutral rating on the stock. The firm highlighted Oddity Tech’s potential for robust double-digit growth and its status as a disruptor in the upscale beauty sector.
Moreover, during its third quarter 2024 earnings call, Oddity Tech Ltd. (NASDAQ:ODD) revealed a staggering 27% year-to-date revenue increase, hitting the $523 million mark. The company’s IL MAKIAGE and SpoiledChild brands, along with a strong direct-to-consumer business strategy, were the main drivers. Due to an increase in order frequency, the average order value also increased by 9% year-over-year. Additionally, the company’s gross margin, which was slightly better than expected at 69.9%, is expected to normalize to roughly 68% in Q4.
3. Zoom Video Communications Inc. (NASDAQ:ZM)
Percentage of stake sold by ARK Invest in Q3: 100%
ARK Investment Management’s Q3 Stake Value: $0
Number of Hedge Fund Holders: 39
Zoom Video Communications Inc. (NASDAQ:ZM) is a software and communications technology company known for its video conferencing app, Zoom. Constantly improving its offerings, the company recently introduced a new Zoom webinar feature that can hold up to 1 million participants, demonstrating the obvious scalability advantage and revolutionizing the way companies can engage with audiences.
In a bullish move, Jefferies raised the price target on ZM from $85 to $100 and upgraded the stock from a Hold to a Buy back in December. The upgrade comes in tandem with a favorable assessment of the company’s prospects through 2025. The possibility that AI could speed up revenue growth is one of the main factors driving the update.
The company came under serious attention after releasing its third-quarter 2024 earnings report. Zoom exceeded forecasts with a 4% year-over-year revenue increase, hitting $1.178 billion. In Fiscal 2025, Zoom Video Communications Inc. (NASDAQ:ZM) expects total revenue to be between $1.175 billion and $1.180 billion, a result of the company’s attempts at increasing its spending percentage among existing clients by implementing creative solutions.
2. Twilio Inc. (NYSE:TWLO)
Percentage of stake sold by ARK Invest in Q3: 100%
ARK Investment Management’s Q3 Stake Value: $0
Number of Hedge Fund Holders: 52
Headquartered in San Francisco, California, Twilio Inc. (NYSE:TWLO) is a prominent American communication technology company that offers programmable communication tools via web service APIs. Offering a wide variety of services through its cloud-based platform, the company provides voice, messaging, video, email, and more.
Analysts at Wolfe Research showed confidence in Twilio Inc. (NYSE:TWLO) on January 16, increasing the price target for the company’s shares from $140 to $150 while maintaining an Outperform rating on the stock. Wolfe cited a number of reasons for the positive assessment, including what the firm calls a “rare convergence of long-term secular tailwinds, positive quarterly checks, and an attractive financial set-up.” Moreover, the firm’s channel checks point to a very successful fourth quarter for Twilio Inc. (NYSE:TWLO), with strong results in core communications services, and more recent offerings like Branded Calling.
Twilio’s Q3 2024 revenue increased by 10% year-over-year to $1.13 billion, with its Communications segment accounting for a sizable $1.06 billion of that total. Additionally, the company’s non-GAAP income from operations rose to a record $182 million. In an effort to increase customer engagement, Twilio Inc. (NYSE:TWLO) has also launched a public beta release of Linked Audiences for Amazon Redshift. This led to Twilio’s segment in the AWS Marketplace to increase 35% year-over-year.
1. ServiceNow, Inc. (NYSE:NOW)
Percentage of stake sold by ARK Invest in Q3: 100%
ARK Investment Management’s Q3 Stake Value: $0
Number of Hedge Fund Holders: 78
ServiceNow, Inc. (NYSE:NOW) is a leading provider of cloud-based software solutions that enable corporations to streamline their digital workflows. The company operates the Now platform, a cloud-based platform with integrated AI that aids governments and multinational companies in digitizing their processes. In the dynamic market for workflow automation solutions, ServiceNow, Inc. (NYSE:NOW) is well-positioned to succeed as the company’s clients continue to recognize the platform’s capacity for optimization and spurring business expansion.
With a price target of $1200, Barclays reaffirmed an Overweight rating on ServiceNow Inc. (NYSE:NOW) on January 17. The confirmation came after the company revealed plans to acquire Cuein, a company specializing in AI-powered conversation data analysis. According to ServiceNow Inc. (NYSE:NOW), the acquisition should be finalized in the first quarter of 2025. The goal of integrating Cuein’s platform is to strengthen ServiceNow’s Workflow Data Fabric technology.
For the third quarter of 2024, ServiceNow Inc. (NYSE:NOW) reported $2,715 million in subscription revenues, a 23% year-over-year growth, and total revenues of $2,797 million, a 22% increase from the preceding year. With a 26% year-over-year increase to $9.36 billion, the company’s current remaining performance obligations (cRPO) show significant potential for future revenue.
Ithaka US Growth Strategy stated the following regarding ServiceNow, Inc. (NYSE:NOW) in its Q4 2024 investor letter:
“Founded in 2004, ServiceNow, Inc. (NYSE:NOW) has become the leading provider of cloud-based software solutions that defi ne, structure, manage and automate workflow services for global enterprises. ServiceNow pioneered the use of the cloud to deliver IT service management (“ITSM”) applications. These applications allow users to manage incidents and to plan new IT projects, provision clouds, manage application performance and build applications themselves. The company has since expanded beyond the ITSM market to provide workflow solutions for IT operations management, customer support, human resources, security operations and other enterprise departments where a patchwork of semi-automated processes have been used with varying success in the past. ServiceNow’s stock rose during the quarter, driven by strong fundamental performance and growing investor recognition of the company’s dominant position in monetizing AI workloads.”
While we acknowledge the potential of NOW, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than NOW but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
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