In this piece, we will take a look at the ten worst ARK stocks to buy according to short sellers.
Investing comes in all sizes and flavors. For the risk averse investors that are looking for steady payouts or long term stability, value and dividend paying stocks are the way to go. For others, that are looking for serious returns, growth stocks are preferred at the cost of higher risk.
One hedge fund that takes a pure play aggressive growth stock investment approach is Cathie Wood’s ARK Investment. Ark is known for investing in stocks that it believes are or will prove to be disruptive. This strategy has seen the firm’s returns somewhat tailored to the broader economic and stock market environment. For instance, during the coronavirus pandemic when interest rates were at historic lows and internet stocks were booming, Ark Investment returned 20% in 2020. This led to Wood giving an interview with Bloomberg where she stressed that her firm kept a multi year investment horizon in mind when buying stocks. She also shared that Ark’s investment approach was thematic in nature, and as opposed to big tech stocks that had reaped most of their returns already, the hedge fund was focusing on sectors that it believed held the most promising futures. Some of the sectors that were on her mind were DNA companies, robotics, blockchain, energy storage, and everyone’s favorite, artificial intelligence.
While we’ll get to the other end of Wood’s returns being tailored to the economy or the broader stock market, artificial intelligence brings another controversial decision that her firm has made to our mind. This was when her firm decided to completely exit Wall Street’s favorite artificial intelligence stock, which ranks 14th on our list of Morgan Stanley’s Highest Conviction Stocks: Top 20 Stocks To Buy and is a multi trillion dollar firm known for its AI GPUs. What do Wood and this stock have in common? Well, her fund cut its stake in the firm by 63% in Q4 2022. Back then, the shares were trading at a post split valuation of $14.61 or at $146 pre split. By June 2024, the stock had soared to $1,131 (pre split) meaning that Ark had missed out on a whopping $854 million in gains.
Commenting on her decision later on, she shared that “we also redeployed a, a good chunk of” the proceeds from the stock sales, “certainly at the later stage of our selling” into the fast growth stock that’s ranked 6th in our list of the 10 Best Fast Growth Stocks To Buy Now. This stock “last year was actually up more” than the GPU company, said Wood, adding that if the GPU stock is “to continue working, we must see this pull through into more of the tech stack. Otherwise, we have some productivity tools and, uh, assistants, that are working at the periphery of organizations but are not getting at, uh, what Dario, the CEO of Anthropic, calls the central part of organizations.”
As to buying the shares again, Wood hasn’t ruled out buying it back again, she will only make such a decision “if there were a significant price correction around, around, let’s say around an inventory” correction. The investor then shared examples of historic inventory corrections especially when the cryptocurrency market underwent this correction and a glut led to the stock dropping by “two thirds in one quarter.”
Cycling back, the stock market’s recent performance has also made an impact on Wood’s portfolio. Looking at the performance of her top ten stock picks during Q4 2020 and analyzing their gains or losses by the close of Q1 2024, only four stocks remained in her portfolio. By the close of H1 2024, these stocks were all in the red. The worst performer amongst them had lost 86% since the start of 2021, while the others’ losses ranged between 73% to 39%. If you’re hoping that the stocks that were eliminated might have fared better, you’d be wrong. Not only are all six in the red, but several have lost more than 80% while one has been delisted from the NASDAQ exchange.
This performance would seem to imply that Wood has lost her stock picking mojo. However, this clearly isn’t the case. With the second quarter of 2024 hedge fund filings out, we can see which Cathie Wood stocks have done well and which have faltered. Analyzing the year to date performance of the top ten Cathie Wood stocks shows that six are in the green. This is noticeably better than how her fourth quarter of 2020 stocks have fared since then. These stocks’ performance ranges between 2.21% to 81.42%, with the top three performers up by 46.91%, 64.19%, and 81.42%, respectively. In the same order, these firms belong to software, financial markets, and data analysis industries and they rank 8th, 6th, and 9th in Cathie Wood’s Q2 2024 investment portfolio.
Before we head to our list of the worst Ark stocks to buy when considering short seller sentiment, it’s also important to understand the rationale behind the fund’s picking strategy. In its annual research report, the fund is still bullish on disruptive innovation. It believes that returns generated by firms that are part of this trend could exceed 40% on an annualized basis during the next seven years for a final market cap of $220 trillion. Ark also believes that AI training costs could drop by 75% per year by 2030, and the market for generalizable, or humanoid, robots could cross $24 trillion in annual revenue. Morgan Stanley seems to agree, and you can read more by checking out $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley.
Cathie Wood of ARK Investment Management
Our Methodology
To make our list of the worst Ark stocks to buy according to short sellers, we ranked 120 stocks out of the 180 present in Ark Invest’s Q2 2024 SEC filings by the percentage of shares outstanding that were sold short and selected the stocks with the highest percentage.
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. Vuzix Corporation (NASDAQ:VUZI)
Short Interest as % of Shares Outstanding: 13.82%
Number of Hedge Fund Investors In Q2 2024: 11
Ark Invest’s Q2 2024 Stake: $48.4 million
Vuzix Corporation (NASDAQ:VUZI) is a small electronics company that sells wearable computing devices and logistics solutions. Since it is in the early stages of commercialization, the firm is yet to turn a profit or earn an operating income. The firm currently generates revenue from smart glasses, and since it has little penetration in the consumer market, Vuzix Corporation (NASDAQ:VUZI)’s revenue is dependent on business customers for the time being. This means that the firm often sees fluctuating sales that rise and drop depending on whether it has received and recognized revenue from orders. However, one advantage for Vuzix Corporation (NASDAQ:VUZI) that stems from selling to large companies is that it can charge high average selling prices for the products. This offers it a considerable advantage over the consumer market, where well funded firms such as Facebook parent Meta already sell smart glasses, headsets, and similar hardware to force new entrants like Vuzix Corporation (NASDAQ:VUZI) be price competitive and sacrifice margins in the process. Vuzix Corporation (NASDAQ:VUZI)’s products are quite technically challenging to manufacture as well which requires it to have a beefy balance sheet to fund development.
Vuzix Corporation (NASDAQ:VUZI)’s management shared details for new contracts that could inject fresh life into its income statement during the Q2 2024 earnings call:
“One of them is on the defense side and one of them is a commercial opportunity. On the defense side, it’s probably going to be $5,000 to $7,000 per asset that we sell into that piece of business. And the first sort of salable or opportunity that it’s going to be filling is upwards of 2,000 pieces. So, like, do the math, it’s pretty easy. It’s $10 million to $14 million worth of business, I think, for the — and that solution that we’ve built can go into a multiple different places and this is just one spot that it was initially designed for. So that’s a pretty significant revenues for just one project. And then, the other one is an imaging system for temperature-related inside of enterprise operations or it’s like maybe places where there’s hot equipment around, motors that might get hot.
You put the glasses on and they can help you determine whether or not there’s maintenance or safety issues or whatever. And that’s an enterprise product that could have significant volumes associated with it, upwards of 20,000 to 30,000 pieces. I’m not sure when that’s going to roll out in that kind of volumes, quite frankly. We’re hoping that it starts to move by the end of this year.”
9. Twist Bioscience Corporation (NASDAQ:TWST)
Short Interest as % of Shares Outstanding: 15.72%
Number of Hedge Fund Investors In Q2 2024: 28
Ark Invest’s Q2 2024 Stake: $302 million
Twist Bioscience Corporation (NASDAQ:TWST) is a medical raw materials supplier that caters to the needs of the DNA and gene editing industry. Wood had owned a $850 million stake in the firm in Q4 2020, and since then, the stock has lost roughly 60%. Twist Bioscience Corporation (NASDAQ:TWST) targets the highly growing, and highly risky, gene editing industry. The potential of gene editing was clear in December 2023 when the FDA approved two gene editing based sickle cell treatments. Along with medicine, gene editing has a host of use cases in other industries such as agriculture and biotechnology. This creates a large TAM for Twist Bioscience Corporation (NASDAQ:TWST), but at the same time, the nascent nature of all these industries means that unless the markets that the products made with Twist Bioscience Corporation (NASDAQ:TWST)’s products grow significantly, the firm will remain a small time player in the healthcare industry. Since it’s a raw materials provider, the firm’s orders typically take place early in the year, which creates revenue volatility.
Twist Bioscience Corporation (NASDAQ:TWST) is busy expanding its product portfolio. During the Q3 2024 earnings call, the firm shared:
“Importantly, we continue to launch new products that build off of our Express Genes portfolio and infrastructure. In May, we launched Multiplexed Gene Fragments with direct synthesis of DNA up to 500 base pairs. This direct synthesis length along with pooling of fragments enable our customers to pursue myriad applications. Some examples include encoding entire viable regions for antibody discovery and encoding entire functional domains of proteins for enzyme engineering, both of which are very useful for parallel screening of AI or ML-generated sequences. In addition, two important applications of this 500 base pairs length enable customers to encode mRNA sequences for personalized therapy or encode multiple guide RNA sequences within a single framework for complex CRISPR screens.
These are just four examples of diverse applications for this innovative product that showcase how we augment our processes continuously to drive innovation and for new products while expanding our infrastructure capacity. Also building onto the Express workflow, in July, we introduced Express Antibodies, both for CHO and HEK293, the two most commonly used cell lines for the antibody discovery and optimization cycle. Multiplexed Gene Fragments and Express Antibodies illustrate the benefit of making all of our DNA on the Express timeline as we do not need to cut the line for particular customers. In addition to growth for our existing portfolio of products, including Express Genes, we will continue to add products that leverage our rapid manufacturing.
These products will target areas of the life science market that we do not serve today and have the potential to expand our share of wallet with existing customers as well as open up new market opportunities.”
8. Teladoc Health, Inc. (NYSE:TDOC)
Short Interest as % of Shares Outstanding: 17.06%
Number of Hedge Fund Investors In Q2 2024: 35
Ark Invest’s Q2 2024 Stake: $73.1 million
Teladoc Health, Inc. (NYSE:TDOC) is a digital healthcare services provider that enables patients virtual access to healthcare professionals. It was one of the top performing stocks during the coronavirus pandemic, as lock down mandates coupled with a global healthcare crisis left the market wide open for the company. At 2021’s close, Teladoc Health, Inc. (NYSE:TDOC)’s revenue sat at a whopping $2 billion. However, while it was able to grow its market share during the pandemic, growth has slowed since then as Teladoc Health, Inc. (NYSE:TDOC) expected 2024’s revenue to sit at $2.6 billion at the end of its Q1. This marks flat growth over 2023, which in itself marked a small 8% growth over 2022’s figures. Despite long term tailwinds that could see Teladoc Health, Inc. (NYSE:TDOC) benefit from a growth in America’s elderly population, the firm is continuing to face uncertainty. This was apparent during the Q2 earnings call, where the firm refused to provide guidance for its full year. The key drivers of Teladoc Health, Inc. (NYSE:TDOC)’s hypothesis are its ability to expand its member network, rely on technology to ensure patients are matched with the right physicians, expand the kinds of care offered on its platform, and expand its presence globally.
Teladoc Health, Inc. (NYSE:TDOC)’s management shared some positives during the Q2 2024 earnings call:
“We are continuing to see strength in the number of recruitables that we have, right. The recruitables momentum continues. And I would say, that is testament to our product offerings. The fact that we are seeing strength in selling Chronic Care bundles increasingly. If you think about our overall Chronic Care bookings, more than half of it was Chronic Care bundles. The reason I mention this is, if you think about your question around, how are we doing in converting those recruitables into Chronic Care enrollees, we don’t give the actual number in terms of enrollment, but it continues to be strong and increase relative to what you quoted as the enrollment numbers in the Livongo days.
And the reason for that is, if you think about our ability increasingly to sell Chronic Care bundles to clients, what happens when you do that is, you will see enrollees essentially enroll into multiple conditions, use multiple off our programs rather than say one diabetes program, etc., and all of that helps from an enrollment perspective.”
7. SoFi Technologies, Inc. (NASDAQ:SOFI)
Short Interest as % of Shares Outstanding: 18.08%
Number of Hedge Fund Investors In Q2 2024: 29
Ark Invest’s Q2 2024 Stake: $96.0 million
SoFi Technologies, Inc. (NASDAQ:SOFI) is a California based financial technology company. One of the new age financial companies, the firm offers loans, accounts, and financial management products. A key differentiating factor for SoFi Technologies, Inc. (NASDAQ:SOFI) is that it targets consumers with high credit scores through its products. This means that its customers are generally well off individuals that are likely to pay back their loans, and it removes an element of risk from its business model that is typically present in financial firms. Being a smaller company allows SoFi Technologies, Inc. (NASDAQ:SOFI) to aggressively target growth, and for 2024, the firm expects to grow its members to 2.3 million or by 30%. The market places a premium on growth for firms like SoFi Technologies, Inc. (NASDAQ:SOFI), and other tenets of its hypothesis include lower interest rates that could spur further borrowing by its customers.
SoFi Technologies, Inc. (NASDAQ:SOFI)’s management shared key figures for its loan portfolio during the Q2 2024 earnings call:
“In terms of non-interest income, Q2 originations grew 22% year-over-year to $5.3 billion and were driven by a record quarter in personal loan originations, which grew 12% year-over-year and 28% sequentially to $4.2 billion. Our student loans business saw origination volume grow 86% year-over-year with a slight 2% decline sequentially to $737 million. Home loans grew by 71% year-over-year and 24% sequentially to $417 million. Our personal loan borrowers’ weighted average income is $168,000 with a weighted average FICO score of 747. Our student loan borrowers’ weighted average income is $137,000 with a weighted average FICO score of 764.
In the second quarter, we sold portions of our personal loan and home loan portfolios totaling nearly $1.6 billion. In terms of the personal loan sales, we closed $1.1 billion of principal at a blended execution of 106.2%. These sales had similar structures to other recent personal loan sales with cash proceeds in line with par or at a small premium to par with the majority of the execution premium consisting of a contractual servicing fee that is capitalized. These deals included a small loss share provision that is above our base assumption of losses and immaterial relative to the exposure we would otherwise have if we held the loans. Our $381 million of home loan sales were sold at a blended execution of 101.9%. Additionally, we sold $69 million of late-stage delinquent personal loans in the quarter.”
6. Archer Aviation Inc. (NYSE:ACHR)
Short Interest as % of Shares Outstanding: 18.41%
Number of Hedge Fund Investors In Q2 2024: 21
Ark Invest’s Q2 2024 Stake: $89.6 million
Archer Aviation Inc. (NYSE:ACHR) is one of the few companies in the world that is developing electric vertical take off and landing aircraft, or EVTOLs. This makes it a high risk, high reward firm as potential successes in the business can unlock a sizeable market while failures, which are likely due to regulatory requirements and technological complexity, can be more costly. This makes it unsurprising that 18.4% of Archer Aviation Inc. (NYSE:ACHR)’s outstanding shares have been sold short. The firm’s key product is its Midnight aircraft, and right now, the airplane is working towards the crucial type certification from the Federal Aviation Administration (FAA). Key strengths for Archer Aviation Inc. (NYSE:ACHR) are its industry partnerships, which include big ticket names such as Stellantis and Boeing as well as a $6 billion backlog which includes orders for Midnight. Therefore, Archer Aviation Inc. (NYSE:ACHR) has to ensure it remains well funded to produce its aircraft once they are certified by the FAA. Any weakness on these fronts could translate into significant headwinds.
Archer Aviation Inc. (NYSE:ACHR)’s management shared details for its air carrier network planning during the Q2 2024 earnings call:
“It’s not enough to just build our order book. We also need to lay the foundation for where these aircraft will fly. Earlier this quarter, we showcased a detailed plan for our air taxi network in the San Francisco Bay Area. This network predominantly leveraged relationships we’ve built with existing aviation infrastructure operators across Silicon Valley, Napa, and the East Bay, including our partners Signature Aviation and Atlantic Aviation. In addition, we revealed our plans with Kilroy Realty for the [indiscernible] vertiport in the heart of South San Francisco, near some of San Francisco’s largest tech companies, including Genentech and Stripe. We also announced plans to develop operational concepts for a joint air taxi network with Southwest Airlines, California’s largest air carrier by passenger and flight volume, operating at 14 airports across the state.
By combining Southwest California airport hubs and frequent interstate flights with Archer’s planned network, the goal is to offer Southwest passengers even faster door-to-door journeys. Routes like Santa Monica to Napa could take less than three hours, nearly half of what they can take today. Today, we unveiled our plans for our air taxi network in Los Angeles. LA commuters spend over 100 hours every year stuck in traffic, and that’s not counting the drives they decide to skip because they didn’t want to spend the time in traffic. This planned network includes takeoff and landing locations at Los Angeles International Airport, USC, Orange County, Santa Monica, Hollywood Burbank, Long Beach, and Van Nuys, alongside our partners Signature and Atlantic Aviation, as well as United and Southwest Airlines.”
5. Recursion Pharmaceuticals, Inc. (NASDAQ:RXRX)
Short Interest as % of Shares Outstanding: 19.18%
Number of Hedge Fund Investors In Q2 2024: 24
Ark Invest’s Q2 2024 Stake: $211 million
Recursion Pharmaceuticals, Inc. (NASDAQ:RXRX) is a mid sized biotechnology company that is in pre commercial stages. It is developing treatments for spinal and brain ailments and tumors, gastrointestinal diseases, ovarian cancer, and other cancers. Since it is a pre commercial company, Recursion Pharmaceuticals, Inc. (NASDAQ:RXRX)’s hypothesis depends on its ability to successfully navigate through clinical trials and meet all endpoints in the readouts. Since it is heavily investing in its pipeline, the firm is yet to turn a positive operating income. Apart from its medicines under development, the firm also provides its operating system for healthcare companies. This allows them to run complex drug discovery processes using large language models, and it is also responsible for NVIDIA’s $50 million investment in Recursion Pharmaceuticals, Inc. (NASDAQ:RXRX) last year. The software introduces somewhat of SaaS-esque trends into the firm’s hypothesis and opens the door to recurring revenue as it signs up large customers like Bayer. Recursion Pharmaceuticals, Inc. (NASDAQ:RXRX) also has ten trial readouts due in the next 18 months, leaving the field open for bearish or bullish outcomes.
Recursion Pharmaceuticals, Inc. (NASDAQ:RXRX) has also partnered with AI drug discovery firm Exscientia, and here’s what management had to say about the affair during the Q2 2024 earnings call:
“And I think this deal, in many ways, will make Recursion perhaps a partner of choice for others in the industry. Finally, our platform. Our platforms at Recursion really focused on exploration of biology, hit discovery, target discovery. We’ve been building that for over a decade, and our colleagues at Exscientia have really been building for about the same amount of time this incredible precision chemistry platform. The ability to go from a hit to a development candidate with active learning and automated synthesis, is really, really exciting to us and putting these two platforms together, we think, is going to put us on the cutting edge. And finally, when we combine these businesses, we believe that we will have not only the team, the tools and the technology to go to the distance, but we’ll also have the resources to do that.
At the end of Q2, the companies combined have roughly $850 million, which we believe, with the right kind of operational synergies, puts us on a runway into 2027.”
4. Verve Therapeutics, Inc. (NASDAQ:VERV)
Short Interest as % of Shares Outstanding: 19.20%
Number of Hedge Fund Investors In Q2 2024: 26
Ark Invest’s Q2 2024 Stake: $14.3 million
Verve Therapeutics, Inc. (NASDAQ:VERV) is a pre commercial stage biotechnology company that is developing gene editing treatments to help manage cholesterol levels and treat heart diseases. The firm’s fate revolves around its three key treatments under development VERVE 101, VERVE 102, and VERVE 201. Among these, VERVE 101 was the most promising up until April 2024 when Verve Therapeutics, Inc. (NASDAQ:VERV)’s stock tanked by a whopping 35% when data showed that the VERVE 101 had presented severe adverse effects including low platelet count. In August, Verve Therapeutics, Inc. (NASDAQ:VERV) shared an update for the drug, noting that the abnormality appeared to stem from liquid nanoparticles in the drug. Trial enrollments are paused, and the narrative has now shifted to VERVE 102, which is currently in clinical trial, and VERVE 201 which is currently preparing for phase 1b trials later this year. VERVE 102’s trial data should be available next year, which significantly pushes Verve Therapeutics, Inc. (NASDAQ:VERV)’s ability to potentially generate revenue in the future.
3. CRISPR Therapeutics AG (NASDAQ:CRSP)
Short Interest as % of Shares Outstanding: 20.16%
Number of Hedge Fund Investors In Q2 2024: 29
Ark Invest’s Q2 2024 Stake: $420 million
CRISPR Therapeutics AG (NASDAQ:CRSP) is one of the earliest movers in the new age gene sequencing industry. The firm develops medicines through its proprietary gene sequencing technology that allows for targeted DNA changes. The technology provides CRISPR Therapeutics AG (NASDAQ:CRSP) a wide moat within its industry, but a lack of diversification means that the firm and its partners have to develop medicines with the platform to generate revenue. CRISPR Therapeutics AG (NASDAQ:CRSP) is operating in one of the fastest growing markets in the world, which is expected to grow at a compounded annual growth rate of 22.3% between 2022 and 2027 for a final value of $9.2 billion. Its trailing twelve month revenue is $200 million, which creates a wide moat for CRISPR Therapeutics AG (NASDAQ:CRSP) to capture the market. So far, the firm has relied on royalty payments, particularly from Vertex due to the sickle cell treatment. CRISPR Therapeutics AG (NASDAQ:CRSP) received $170 million in 2023 and is eligible for another $130 million.
2. Arcturus Therapeutics Holdings Inc. (NASDAQ:ARCT)
Short Interest as % of Shares Outstanding: 20.17%
Number of Hedge Fund Investors In Q2 2024: 19
Ark Invest’s Q2 2024 Stake: $47.8 million
Arcturus Therapeutics Holdings Inc. (NASDAQ:ARCT) is a California based biotechnology firm that is in the late clinical stages for several drugs. Its two key treatments are ARCT-810 and ARCT-032. These drugs target ammonia buildup in the blood and cystic fibrosis. The fact that it is in late stage clinical trials removes some of the risk from Arcturus Therapeutics Holdings Inc. (NASDAQ:ARCT)’s that is present in other biotechnology companies. Amongst the two drugs, ARCT-032 is further ahead in the development pipeline, with the firm aiming to start a phase two study of the drug later this year. For ACT-810, the leading treatment among the two, Arcturus Therapeutics Holdings Inc. (NASDAQ:ARCT) expects that data from an initial phase two trial in Europe should be available soon. Another drug that the firm is developing is ARCT-2301, which is a coronavirus treatment.
Arcturus Therapeutics Holdings Inc. (NASDAQ:ARCT)’s management shared key details for its licensing revenue during the Q2 2024 earnings call:
“Arcturus achieved a total of approximately $437.1 million in upfront payments and milestones from CSL as of June 30th, 2024.
We continue to expect to receive future milestone payments from CSL supporting the ongoing development of the COVID and flu programs and three additional vaccine programs by CSL. I am happy to report the expected cash runway extend through the first quarter of fiscal year 2027 based on the current pipeline and programs. In summary, we believe that the Company remains on a strong financial position and has the resources needed to achieve multiple near term value creating milestones for the vaccine and therapeutic programs. Furthermore, with the anticipated launch of Kostaive later this year in Japan, we look forward to beginning to report potential commercial milestones and revenues.”
1. Pacific Biosciences of California, Inc. (NASDAQ:PACB)
Short Interest as % of Shares Outstanding: 22%
Number of Hedge Fund Investors In Q2 2024: 18
Ark Invest’s Q2 2024 Stake: $45.5 million
Pacific Biosciences of California, Inc. (NASDAQ:PACB) is a medical devices company that makes and sells products such as gene sequencing systems, sequencing kits, and consumables. It has one of the most diversified portfolios when it comes to gene sequencing, as the firm sells both long and short sequencing products. However, the revolutionary nature of Pacific Biosciences of California, Inc. (NASDAQ:PACB)’s products means that they might not be easily popular among users. At the same time, the high costs of developing these machines, which cost more than $700,000 in several cases, mean that the firm has to ensure a stable revenue flow to keep investors happy. Pacific Biosciences of California, Inc. (NASDAQ:PACB)’s consumables business also tends to thrive when rates are low as it allows more biotechnology and high growth pharma firms to develop new products. The firm is yet to generate an operating profit and management expects the business to turn cash flow positive in 2026.
Pacific Biosciences of California, Inc. (NASDAQ:PACB)’s management shared key details for cost control, which should drive its hypothesis until sales pick up, during the Q2 2024 earnings call:
“As we discussed, we have made significant progress on improving the per unit production costs of both Revio instruments and Revio consumables, and expect both to end the year approximately 20% lower than when we launch the platform. We anticipate that these costs and operational improvements will continue beyond 2024 and are expected to drive quarterly growth margin expansion this year and going forward. However, our total growth margins in the second half may fluctuate quarter-to-quarter based off on product mix, customer project mix, and ASP. Moving to operating expenses, we remain diligent in our efforts to lower cash burn and spend profile and expect non-GAAP operating expenses to be around the lower end of our 300 million to 310 million range.”
PACB is the worst Cathie Wood stock to buy as per short sellers. But our conviction lies in the belief that some 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 PACB but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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