Cathie Wood's Recent Portfolio Moves

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【Summary】Cathie Wood of Ark Invest has sold Tesla and Shopify shares and bought Archer Aviation, a high-risk growth stock in the electric vehicle takeoff and landing (eVTOL) aircraft industry. Wood remains bullish on Tesla and Shopify, but the sales were likely made to free up funds for other investments. Archer is a pioneering player in flying electric vehicles and has secured significant funding.

FutureCar Staff Aug 23, 2023 6:40 AM PT

Ark Invest CEO Cathie Wood has been trimming her holdings in Tesla and Shopify from the investment firm's ETFs. On August 15, Ark Invest sold 1,884 shares of Tesla stock, followed by the sale of 182,314 shares of Shopify stock the next day.

Interestingly, the funds from these sales are being used to invest in Archer Aviation, a high-risk growth stock with great potential. On August 16, Wood's company purchased approximately $16 million worth of Archer Aviation shares for its Ark Innovation ETF.

Wood's recent stock moves indicate that she is still bullish on Tesla and Shopify. Despite the recent sales, Tesla remains the largest stock holding in Ark's flagship Ark Innovation ETF, accounting for 10.1% of the portfolio. Similarly, Shopify accounts for approximately 9.6% of the portfolio weight in the Ark Fintech Innovation ETF.

Ark's sales of Tesla and Shopify were relatively small compared to their overall holdings. The sales were likely made to free up funds for other potentially explosive investments. Wood appears to be increasingly excited about Archer Aviation.

Archer Aviation is a pioneering player in flying electric vehicles and has seen significant growth since going public in 2021. Wood believes that Archer has the potential to be a long-term winner. The recent investment in Archer is not the first that Ark has made in the company.

Archer recently announced that it secured $215 million in new investment funding, with Ark being one of the investors. The company's total funding now exceeds $1.1 billion. The urban air-mobility market is projected to be worth billions annually in the coming years.

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. Archer also has a deal with the U.S. Department of Defense.

While there is promise in Archer's future, investors should be aware that the outlook is highly speculative. Wood is known for her high-risk, high-reward investments, but Archer Aviation currently represents a relatively small portion of Ark's flagship growth fund, accounting for approximately 0.4% of the fund's total stock holdings.