Cathie Wood sells $5 million worth of shares in two booming tech companies

Change is inevitable, of course, but Kathy Wood says you have to be on the right side of those changes. Wood, CEO of Ark Investment Management, said on the firm’s website that “we only invest in disruptive innovation.” The world is currently undergoing some truly massive and disruptive changes, thanks in large part to the growth and potential impact of artificial intelligence.

Wood, who once said that “the strongest bull markets I’ve been in were built on a foundation of uncertainty,” has been a controversial figure over the years, with supporters calling her Mama Cathie and critics attacking her for her investing style.

So who is she?

Born in Los Angeles, Wood attended the University of Southern California, where she was mentored by renowned economist Arthur Laffer, an advisor to Presidents Ronald Reagan and Donald Trump. Laffer landed Wood a job as an assistant economist at Capital Group in 1977. In 2001, she joined AllianceBernstein as chief investment officer of global thematic strategies, where she managed $5 billion and was criticized for underperforming the broader market during the 2007-2008 financial crisis.

Ark focuses on emerging companies Wood left AllianceBernstein in 2014 after the firm decided her idea for actively managed ETFs based on disruptive innovation was too risky. She founded Ark Investment and named her company after the Ark of the Covenant.

Ark’s ETFs typically buy stocks of emerging companies in high-tech categories such as artificial intelligence, blockchain, DNA sequencing, energy storage and robotics. Critics have not been particularly impressed with Wood’s performance, with investment giant Morningstar criticizing her in February as the fund that has destroyed the most wealth in the past 10 years, worth an estimated $14.3 billion.

“We don’t fit their style,” Wood says of her critics. “And I think style frames will become a thing of the past as technology blurs the lines between sectors.”

Fintech company SoFi Technologies (SOFI) and big data analytics company Palantir (PLTR) are two of the biggest names in the tech sector right now, and Wood recently sold shares in both companies.

Ark Fintech Innovation ETF (ARKF) sold 82,872 shares of SoFi on Nov. 22 for a total of $1.24 million. The fund currently holds $58.72 million in SoFi shares. SoFi shares are up 59.5% year to date. Last month, SoFi beat Wall Street’s earnings expectations, and at the time, TheStreet Pro’s Stephen Guilfoyle said that SoFi CEO Anthony Noto “doesn’t miss a beat.”

“Longtime SOFI investors, I’m sure, have noticed that every time the stock has gone down since Noto took over, he’s added to his stake in the company with his own money,” the veteran trader said. “Noto, as he’s shown throughout his career, is a leader.” Ark Innovation ETF (ARKK) sold 73,021 shares of Palantir, worth $4.48 million. The fund currently owns $353.9 million in the data analytics software company’s stock. Palantir, which was recently added to the S&P 500, has established itself as a key player in the defense industry, with a number of contracts with domestic and international agencies that focus on its data analytics and artificial intelligence technologies.

Analyst says Palantir is poised to dominate

The company’s shares are up 276.4% year to date and 236.6% from a year ago.

Investment firms adjusted their price targets for Palantir on Nov. 25.

Fund manager buys and sells:

• Kathy Wood buys $38 million in tech stock
• Kathy Wood sells shares of underperforming technology company for $48 million
• Kathy Wood sold shares of a growing fintech company for $12.8 million

Bank of America Securities analyst Mariana Perez Mora raised the investment firm’s price target for Palantir from $55 to $75, The Fly reports. The company has proven it can digitize businesses and battlefields, from finance to missile manufacturing, she said. The analyst sees Palantir as “the enabler and winner in this new era” in which efficiency, innovation, safety and speed are the most valuable assets.

Software accounts for 17% of non-resource private fixed investment in the U.S., said Mora, who believes Palantir is “poised to dominate” as companies turn to software and artificial intelligence to increase margins rather than scale with fixed assets.

Bank of America has a “buy” rating on Palantir shares.

Wedbush analyst Daniel Ives raised the firm’s price target for Palantir from $57 to $75 and maintained an “above average” rating on the stock. The decision reflects his increased confidence in Palantir’s strategies for artificial intelligence platforms, with AI usage expected to gain momentum over the next 12 to 18 months.

Ives described Palantir as the “Messi of the AI ​​growth story,” a reference to Argentine soccer legend Lionel Messi. He said PLTR shares will experience unprecedented demand as more enterprises realize the value of Palantir’s product portfolio as AI adoption increases.

Ives said these AI applications are “exploding,” that the enterprise consumption phase will begin in 2025 with the release of large language models, and that true adoption of generative AI will be a major catalyst for the software sector.

To reflect Wedbush’s increased optimism about the next phase of the AI ​​revolution in the software sector in 2025, Ives upgraded his ratings on Elastic (ESTC) and Snowflake (SNOW) to “above average,” while also increasing his price target on Salesforce (CRM) from $325 to $375.