Cathie Wood's Latest Portfolio Moves

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【Summary】Cathie Wood's investment firm, Ark Invest, has sold shares in Tesla and Shopify but has invested in Archer Aviation, a maker of flying vehicles. Wood still has confidence in Tesla and Shopify, as they remain significant holdings in Ark's portfolios. Archer Aviation is seen as a potentially explosive growth stock, and Wood seems excited about its long-term potential. Archer recently secured significant investment funding and aims to achieve FAA certification by 2025.

FutureCar Staff Aug 24, 2023 9:45 AM PT

Ark Invest CEO Cathie Wood has been trimming holdings in Tesla and Shopify from the firm's various exchange-traded funds (ETFs). On August 15, Ark Invest sold 1,884 shares of Tesla, followed by the sale of 182,314 shares of Shopify the next day.

Interestingly, the funds from these sales are being used to invest in an even more potentially explosive, high-risk growth stock.

On August 16, Wood's company purchased approximately $16 million worth of Archer Aviation shares for its Ark Innovation ETF. Archer is a maker of flying vehicles, specifically electric vehicle takeoff and landing (eVTOL) aircraft, and its business is still in a pre-revenue state.

Wood's recent stock moves indicate that she is still bullish on Tesla and Shopify. While she has sold shares of both companies, Tesla remains the largest stock holding in Ark Innovation ETF, accounting for 10.1% of the total portfolio weight. Shopify, on the other hand, accounts for approximately 9.6% of the total portfolio weight in the Ark Fintech Innovation ETF.

Ark's sales of Tesla and Shopify were relatively small compared to their overall holdings. The moves were likely made to free up funds for other potentially explosive investments, such as Archer Aviation.

Archer Aviation went public in 2021 through a merger with a special purpose acquisition company (SPAC). The company's stock has seen volatile swings since its public debut but has experienced significant growth in 2023, with a year-to-date increase of approximately 220%.

Wood sees Archer as a long-term winner in the flying electric vehicle industry. The company recently secured $215 million in new investment funding, bringing its total funding to over $1.1 billion. The urban air-mobility market is projected to be worth $29 billion annually in 2023 and over $1 trillion by 2040.

Archer aims to achieve FAA certification and begin commercial operations in 2025. The company's Midnight vehicle has already received the FAA special airworthiness certificate, allowing it to fly in limited settings and scenarios in U.S. airspace.

While there is promise in Archer Aviation, investors should note that its outlook is highly speculative. Wood has made investments in the company but it still represents a relatively small portion of Ark's flagship growth fund, with Archer stock accounting for approximately 0.4% of the fund's total stock holdings.