Cathie Wood is Selling These 5 Stocks in 2023

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1. Adobe Inc. (NASDAQ:ADBE)

Number of Hedge Fund Holders: 99

Adobe Inc. (NASDAQ:ADBE) was one of the stocks dumped by Cathie Wood during the first quarter of this year as her hedge fund sold over 43,000 shares of the company, entirely exiting its position held in the fourth quarter of 2022. Adobe Inc. (NASDAQ:ADBE) shares recently fell after regulators in the UK announced to investigate the company’s $20 billion deal to buy interface design tool company Figma over competition concerns.

As of the end of the fourth quarter of 2022, 99 hedge funds (including ARK) tracked by Insider Monkey had stakes in Adobe Inc. (NASDAQ:ADBE), up from 93 funds in the previous quarter.

Polen Focus Growth Strategy made the following comment about Adobe Inc. (NASDAQ:ADBE) in its Q1 2023 investor letter:

“One area we are watching regarding Alphabet and Adobe Inc. (NASDAQ:ADBE) is AI systems and their capabilities, including generative AI. Interestingly, both Adobe and Alphabet could see benefits or threats from the emergence of generative AI and large language models (LLMs). Both companies already use generative AI to the benefit of their users in anticipating how content creators edit their work (Adobe) and in how search results are anticipated and generated (Google). At the same time, breakthrough technologies like AI can open the door to additional competition and/or impact a company’s profitability levels. We now see AI systems others are developing, including LLMs and generative AI offerings, that could be more competitive in the future. While we think it remains early days for ChatGPT and the capabilities of these types of LLMs and generative AI programs like DALL-E, the technology seems to be progressing at a fast rate and will at least require a strong response from incumbents.

As of now, we believe Alphabet and Adobe are leaders in their own right in these areas and have a clear path to improving their existing offerings with AI advancements, which would allow them to be net beneficiaries of AI. There are also significant barriers to building leading AI offerings in these areas. As a result, our position sizes in Adobe and Alphabet remain sizeable. For Adobe, the status of its pending $20 billion-plus Figma acquisition is also uncertain. There is a good chance, in our view, that it will be blocked by regulators, which would mean the future opportunity to expand its offerings to the developer community (beyond designers) may not occur.”

You can also take a peek at 10 Cheap Rising Stocks to Buy and 11 Boring Stocks That Pay Dividends.

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