12 Tech Stocks To Sell Right Now According To Cathie Wood

Published on March 4, 2024 at 8:48 am by Hamna Asim in Hedge Funds, News

In this article, we discuss 12 tech stocks to sell according to Cathie Wood. If you want to skip our discussion on Cathie Wood’s latest investment plays, head over to 5 Tech Stocks To Sell Right Now According To Cathie Wood.

ARK Invest CEO Cathie Wood is adapting her investment strategy to navigate an anticipated deflationary period in 2024, focusing on innovation and technological advancements. She discussed this approach on CNBC’s “The Exchange”, emphasizing its relevance in the 2024 market landscape. Wood anticipates an aggressive rate cut by the Federal Reserve, creating an economic environment where companies adept at deflation and dedicated to innovation can experience significant expansion. Wood’s flagship fund, the ARK Innovation ETF, witnessed a noteworthy 70% year-to-date increase in 2023. As the market stabilizes, ARK is diversifying its portfolio, considering the potential reopening of the IPO market and reintroducing previously sold names with improving outlooks.

Wood’s strategy shift includes an increased focus on companies leading in AI and technology, exemplified by her renewed interest in Meta Platforms, Inc. (NASDAQ:META). She highlighted Meta’s alignment with CEO Mark Zuckerberg’s use of open-source AI. Wood also emphasized the transformative potential of gene editing technologies, particularly mentioning CRISPR Therapeutics, following the FDA approval of the first gene therapy using CRISPR CAS 9 for sickle cell disease. Despite early-stage pricing inefficiencies and cash-burn issues, Wood sees the gene editing sector as an attractive investment opportunity. In another noteworthy development, Coinbase Global, Inc. (NASDAQ:COIN) surpassed Tesla, Inc. (NASDAQ:TSLA) and became ARK’s top holding in Q4 2023.

According to Cathie Wood, the hype around electric vehicles is just beginning. In the firm’s recent “Big Ideas” report, Wood predicts that sales of new battery-powered cars could increase by a third each year, reaching 74 million in 2030, with autonomous driving capabilities. Despite approximately 10 million EVs delivered in 2023, the forecast suggests substantial growth. At an average selling price of $20,000 per EV, this could result in over $1.4 trillion in annual revenue potential for EV manufacturers. Wood believes these companies may capture a tenth of that as profit before interest and tax. The downside is a potential decline in demand for internal combustion engine cars, as global new vehicle sales are projected to be around 100 million in 2030. This shift may lead to a “death spiral for incumbent auto manufacturers,” warned ARK Invest. Wood gained prominence for her successful bets on Tesla, forecasting a target share price of $2,000 in 2027, primarily driven by Elon Musk solving autonomous driving challenges. Looking ahead to 2040, ARK Invest envisions a “Cambrian explosion” in battery technology applications, leading to the transformation of urban landscapes with the advent of flying taxis.

Moreover, in January 2024, Cathie Wood raised her bullish estimate for Bitcoin’s price to $1,500,000 by 2030, a 50% increase from her previous prediction of $1 million. Wood attributed the increased likelihood of this optimistic scenario to the recent SEC approval of spot Bitcoin ETFs in the United States. According to her, this approval serves as a green light for the cryptocurrency. In a bear case, Wood anticipates a price of $258,500, while the base case is set at $682,800. ARK Invest supported its projections by pointing to factors such as a higher hashrate, long-term holder supply, and addresses with a non-zero balance.

While Cathie Wood is bullish on innovation and disruptive technologies, some of the stocks to sell according to the ARK CEO include NVIDIA Corporation (NASDAQ:NVDA), Sea Limited (NYSE:SE), and Stratasys Ltd. (NASDAQ:SSYS).

Our Methodology

We scanned Cathie Wood’s ARK portfolio for Q4 2023 and selected the technology stocks where she discarded her stake by at least 20% or more in the last quarter of 2023. We have arranged the list in the ascending order of the percentage of stake discarded. We have also assessed the hedge fund sentiment from Insider Monkey’s database of 933 elite hedge funds tracked as of the end of the fourth quarter of 2023. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here).

Cathie Wood of ARK Investment Management

Tech Stocks To Sell Right Now According To Cathie Wood

12. Check Point Software Technologies Ltd. (NASDAQ:CHKP)

Number of Hedge Fund Holders: 38

Percentage of Stake Discarded: 20%

Check Point Software Technologies Ltd. (NASDAQ:CHKP) is a global IT security company that develops, markets, and supports a range of products and services. Their offerings include a multilevel security architecture, cloud, network, mobile devices, endpoints information, and IoT solutions. In the fourth quarter of 2023, Cathie Wood trimmed 20% of her stake in Check Point Software Technologies Ltd. (NASDAQ:CHKP), holding 13,702 shares worth $2 million.

On February 6, Check Point Software Technologies Ltd. (NASDAQ:CHKP) reported a Q4 non-GAAP EPS of $2.57 and a revenue of $664 million, outperforming Wall Street estimates by $0.09 and $1.5 million, respectively.

According to Insider Monkey’s fourth quarter database, 38 hedge funds were long Check Point Software Technologies Ltd. (NASDAQ:CHKP), compared to 31 funds in the earlier quarter. John W. Rogers’ Ariel Investments is the leading stakeholder of the company, with 1.5 million shares worth $229.2 million.

Like NVIDIA Corporation (NASDAQ:NVDA), Sea Limited (NYSE:SE), and Stratasys Ltd. (NASDAQ:SSYS), Check Point Software Technologies Ltd. (NASDAQ:CHKP) is one of the stocks to sell according to ARK Invest.

Here is what Diamond Hill International Fund Concentrated Fund has to say about Check Point Software Technologies Ltd. (NASDAQ:CHKP) in its Q1 2022 investor letter:

“Check Point reported a solid Q4 as the company continues its lengthy transition towards a subscription-based sales model. We expect the firm to consistently repurchase shares with the substantial free cash flow it generates each year.”

11. L3Harris Technologies, Inc. (NYSE:LHX)

Number of Hedge Fund Holders: 37

Percentage of Stake Discarded: 20%

L3Harris Technologies, Inc. (NYSE:LHX) ranks 11th on the list of stocks to sell according to Cathie Wood. It is a global provider of mission-critical solutions for government and commercial clients. The company operates in several segments – Integrated Mission Systems, offering intelligence, surveillance, and reconnaissance systems; Space and Airborne Systems, providing space payloads, sensors, and mission solutions; Communication Systems, delivering broadband and tactical communication solutions; and Aerojet Rocketdyne, offering propulsion technologies for defense and space missions. In Q4 2023, Cathie Wood discarded 20% of her stake in L3Harris Technologies, Inc. (NYSE:LHX). She held 63,700 shares worth $13.4 million.

On February 23, L3Harris Technologies, Inc. (NYSE:LHX) declared a $1.16 per share quarterly dividend, a 1.8% increase from its prior dividend of $1.14. The dividend is payable on March 22, to shareholders on record as of March 8.

According to Insider Monkey’s fourth quarter database, 37 hedge funds were long L3Harris Technologies, Inc. (NYSE:LHX), down from 44 funds in the last quarter.

Diamond Hill Mid Cap Strategy made the following comment about L3Harris Technologies, Inc. (NYSE:LHX) in its Q3 2023 investor letter:

“L3Harris Technologies, Inc. (NYSE:LHX) is a defense contractor focused primarily on communications, surveillance and electronic warfare. We anticipate the US’s defense budget will be better than expected over the next few years as the Defense Department focuses on preparing for peer-level threats — an area in which LHX’s capabilities fit nicely. We believe there is room for improvement in recent execution — particularly at recently acquired Aerojet Rocketdyne — and we think LHX’s new management team is well-qualified to improve results. We accordingly capitalized on a recent share-price decline to initiate a position at what we consider a compelling valuation.”

10. Xerox Holdings Corporation (NASDAQ:XRX)

Number of Hedge Fund Holders: 25

Percentage of Stake Discarded: 21%

Xerox Holdings Corporation (NASDAQ:XRX) is a global workplace technology company that integrates hardware, services, and software for enterprises worldwide. In Q4 2023, Cathie Wood’s ARK Invest sold 21% of its stake in Xerox Holdings Corporation (NASDAQ:XRX). At the end of December, Wood owned 9,874 shares of the company worth $180,990.

On February 22, Xerox Holdings Corporation (NASDAQ:XRX) declared a quarterly dividend of $0.25 per share, in line with previous. The dividend is distributable on April 30, to shareholders on record as of March 29.

According to Insider Monkey’s fourth quarter database, Xerox Holdings Corporation (NASDAQ:XRX) was part of 25 hedge fund portfolios, compared to 20 in the last quarter. Mark Coe’s Intrinsic Edge Capital is a prominent stakeholder of the company.

9. CyberArk Software Ltd. (NASDAQ:CYBR)

Number of Hedge Fund Holders: 50

Percentage of Stake Discarded: 22%

CyberArk Software Ltd. (NASDAQ:CYBR) is one of the stocks to sell according to Cathie Wood. CyberArk Software Ltd. (NASDAQ:CYBR) develops and sells software-based security solutions and services. The company’s solutions include Privileged Access Manager, Vendor Privileged Access Manager, Endpoint Privilege Manager, Cloud Entitlements Manager, as well as Secrets Manager. In the December quarter, Cathie Wood sold 22% of her stake in CyberArk Software Ltd. (NASDAQ:CYBR). She held 10,984 shares of the company worth $2.40 million.

On February 8, CyberArk Software Ltd. (NASDAQ:CYBR) reported a Q4 non-GAAP EPS of $0.81 and a revenue of $223.1 million, topping market expectations by $0.34 and $13.36 million, respectively.

According to Insider Monkey’s fourth quarter database, 50 hedge funds were bullish on CyberArk Software Ltd. (NASDAQ:CYBR), compared to 32 funds in the prior quarter. RGM Capital is the largest stakeholder of the company, with 1 million shares worth over $221 million.

Wasatch Small Cap Core Growth Strategy made the following comment about CyberArk Software Ltd. (NASDAQ:CYBR) in its Q4 2022 investor letter:

“IT accounted for several of the greatest detractors from strategy performance during the fourth quarter. Among these were Paylocity Holding Corp. (PCTY), CyberArk Software Ltd. (NASDAQ:CYBR) and Q2 Holdings, Inc. (QTWO).

A cybersecurity company that operates globally, CyberArk specializes in products and services to protect and safeguard customers’ IT networks and devices. A recent flurry of buyouts by private equity firms has fostered an active rumor mill that’s at times produced rapid gyrations in the prices of cybersecurity stocks. We suspect CyberArk may have been the target of some of this speculation during the third quarter. Moreover, the growing slate of security products offered by cloud-computing giants Microsoft, Amazon Web Services and Google may have bruised investor sentiment toward the group.”

8. Taboola.com Ltd. (NASDAQ:TBLA)

Number of Hedge Fund Holders: 26

Percentage of Stake Discarded: 23%

Taboola.com Ltd. (NASDAQ:TBLA) operates an artificial intelligence-based algorithmic engine platform globally. The company’s Taboola platform collaborates with websites, devices, and mobile apps to provide recommendations for editorial content and advertisements on the open web. Taboola.com Ltd. (NASDAQ:TBLA) is one of the stocks to sell as per Cathie Wood. The ARK portfolio, as of Q4 2023, held 523,612 shares worth $2.26 million after Wood slashed 23% of her stake.

On February 28, Taboola.com Ltd. (NASDAQ:TBLA) reported a Q4 GAAP EPS of $0.01, beating market consensus by $0.05. The revenue of $419.8 million, however, fell short of Wall Street estimates by $17.7 million.

According to Insider Monkey’s fourth quarter database, 26 hedge funds held stakes in Taboola.com Ltd. (NASDAQ:TBLA), compared to 21 funds in the last quarter. Josh Goldberg’s G2 Investment Partners Management is the largest stakeholder of the company, with 2.6 million shares worth $11.3 million.

7. PTC Inc. (NASDAQ:PTC)

Number of Hedge Fund Holders: 47

Percentage of Stake Discarded: 24%

PTC Inc. (NASDAQ:PTC) is a software company providing solutions for product lifecycle management, industrial Internet of Things, field service management, and more. The company’s diverse offerings include applications for CAD technology, augmented reality, and dynamic publishing. PTC Inc. (NASDAQ:PTC) is one of the stocks to sell according to Cathie Wood, who discarded 24% of her stake in Q4 2023. ARK Invest held 27,220 shares of PTC worth $4.76 million.

On January 31, PTC Inc. (NASDAQ:PTC) reported its financial results for the quarter ending December 31, 2023. The company posted a non-GAAP EPS of $1.11 and a revenue of $550.21 million, beating Wall Street estimates by $0.14 and $12.22 million, respectively.

According to Insider Monkey’s fourth quarter database, 47 hedge funds were long PTC Inc. (NASDAQ:PTC), compared to 38 funds in the prior quarter. Stephen Mandel’s Lone Pine Capital is the biggest stakeholder of the company.

6. Autodesk, Inc. (NASDAQ:ADSK)

Number of Hedge Fund Holders: 46

Percentage of Stake Discarded: 26%

Autodesk, Inc. (NASDAQ:ADSK) is a global provider of 3D design, engineering, and entertainment technology solutions. The company offers a range of software products, including AutoCAD for design and visualization, Fusion 360 for 3D CAD, CAM, and engineering. Autodesk serves architecture, engineering, construction, product design, manufacturing, and media and entertainment sectors. Cathie Wood slashed 26% of her stake in Autodesk, Inc. (NASDAQ:ADSK) in Q4 2023. She owned 18,316 shares worth $4.46 million.

On February 20, Baird noted that Autodesk, Inc. (NASDAQ:ADSK) has an attractive business model, indicating a recommendation for investors to continue buying shares into fiscal years 2025 and 2026. The feedback from resellers in the fourth quarter is viewed as positive and consistent with the previous quarter.

According to Insider Monkey’s fourth quarter database, 46 hedge funds were bullish on Autodesk, Inc. (NASDAQ:ADSK), compared to 51 funds in the last quarter. William Von Mueffling’s Cantillon Capital Management is the largest stakeholder of the company, with 1.70 million shares worth $414.5 million.

Like NVIDIA Corporation (NASDAQ:NVDA), Sea Limited (NYSE:SE), and Stratasys Ltd. (NASDAQ:SSYS), Autodesk, Inc. (NASDAQ:ADSK) is one of the stocks to sell according to Cathie Wood.

RiverPark Large Growth Fund made the following comment about Autodesk, Inc. (NASDAQ:ADSK) in its Q2 2023 investor letter:

“Autodesk, Inc. (NASDAQ:ADSK): Autodesk was our next top detractor despite quarterly results reported in late May that were in line with expectations. For 1Q, revenue grew 12%, Remaining Performance Obligation (RPO) grew 15%, and the company generated $714 million of FCF, which increased 69% year over year. Profitability for the company was strong, with a 32% non-GAAP operating margin for the quarter, and management reiterated its outlook for the year.

Autodesk has a near monopoly on software for designing, building, and managing buildings, as well as software for infrastructure and manufacturing plants, prototyping software for manufacturers of products (including autos, machinery, and consumer products) and document sharing. As a result, we believe ADSK’s business is very sticky. The company expects to grow revenue mid-teens annually over the next several years, and, as we have seen in similar SaaS businesses, as revenue scales, operating margins are expected to expand significantly from their current 32% to more than 40%, more in-line with peers. We believe that ADSK shares can grow along with its mid-teens free cash flow growth over the next several years.”

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