Cathie Wood Engages in Cost-Cutting Strategy: Three Stocks She Recently Purchased
Cathie Wood had a laid-back debut for the final week of February. As the co-founder, CEO, and mastermind behind Ark Invest, she executed merely four deals across her collection of growth-centric exchange-traded funds. I'd like to delve into three of those transactions.
Wood bolstered her positions in Amazon (AMZN 0.04%), Iridium (IRDM -0.10%), and Datadog (DDOG -2.15%) on the 25th of February. Let's dissect Ark's recent acquisitions.
1. Amazon
Amazon serves as a digital hub, but the e-commerce giant is also a formidable shopper itself. Amazon has pumped an eye-popping $8 billion into AI startup Anthropic, initially valued at $14 billion back in December. That investment is set to escalate, with Anthropic eyeing a $2 billion funding round – which skyrocketed to $3.5 billion due to strong investor interest. In turn, Anthropic's valuation soared to $61.5 billion.
A few days after hitting a new all-time high, Amazon retreated 12% in value. While the company decisively beat earnings for the fourth quarter, tepid guidance dampened investor enthusiasm. Growth has noticeably slowed for Amazon, failing to surpass a 12% increase in revenue over the past three years. The e-commerce behemoth reported a ten-percent rise in net sales during Q4 and 11% for 2024, before unveiling a forecast of mere 5% to 9% expansion for the current quarter – figures that haven't been witnessed since 2001.
There are some silver linings, though. Amazon's bottom line has been burgeoning at a much faster speed, but this still doesn't make the stock an attractive buy given its current multiple. With the correction, the shares are going for 34 times this year's projected profit and 28 times next year's earning target. Despite lingering regulatory concerns, Wood still sees merit in snapping up Amazon when its popularity dips among investors.
2. Iridium
Iridium is the lone victor in this list, posting gains this year, but investors shouldn't break out the champagne just yet. Iridium shares have tumbled by more than 20% since the beginning of last year. Iridium's business momentum is steady, growing by single-digits every year except for a two-percent gain in 2023.
Iridium's fourth-quarter earnings report was positively received, with revenue climbing by 9% due to an 8% increase in customers. The company now boasts nearly 2.5 million billable subscribers. Iridium predicts flagship service revenue to ascend by a modest 5% to 7% in 2025.
3. Datadog
Amazon’s share price has seen only a hint of decline in 2025, but Datadog has reported a more substantial fall, losing 18% of its value this year. The entire plunge has occurred within the past seven trading days following the release of disappointing financial results. However, Datadog has enjoyed an impressive run since its IPO in 2019, nearly tripling its value in the process.
Datadog offers cloud monitoring as a service. Its enterprise software modules help monitor a site's downtime and other critical metrics. The fourth-quarter earnings revealed mixed results, with revenue spiking by 26% despite missing Wall Street expectations. Datadog handily beat earnings targets as well.
However, like with Amazon, it was guidance that shocked investors. Datadog expects revenue to stagnate sequentially, decelerating to 19% growth for the year. The forecast also predicts a decrease in adjusted earnings for 2025. Datadog shares have slid in each of the past seven trading days since the financial update. When Wood has faith in a company, she often treats downturns as opportunities to invest further.
- Cathie Wood's Ark Invest also invested in the tech company, Datadog (DDOG), on February 25th, showcasing her interest in the analytical tools sector.
- In the world of finance, many investors are closely watching the performance of tech stocks such as Datadog, and Wood's move could be seen as an indication of potential growth in this sector.
- When discussing the 'ace' investments of Ark Invest, one cannot neglect to mention the company's recent buy into Datadog, further strengthening their 'aussiedlerbote' of technology stocks.
- Despite Datadog's recent dip in stock price, Cathie Wood saw the decline as an opportunity and increased her stake in the company, reflecting her confidence in the long-term potential of the tech stock.
