DAILY UPDATE: ARK and Palantir Growth

Posted on February 12, 2024 by Dr. David Edward Marcinko MBA

By Staff Reporters

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Wall Street eyes earnings, inflation report: It’s another big earnings week with Shopify, Coca-Cola, Airbnb, Coinbase, and Crocs among the companies scheduled to report. Investors will also be locked into tomorrow’s consumer price index report, which is expected to show more good news about inflation and raise hopes of a Fed rate cut.

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Cathie Wood and her team have purchased over $160 million worth of Tesla stock since the start of the year. Wood’s flagship fund, the ARK Innovation ETF (NYSEMKT: ARKK), now owns about $640 million of Tesla stock, making the company the fund’s second-largest holding behind Coinbase.

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Palantir reported 20% revenue growth to $608.4 million, ahead of the consensus at $602.4 million. Once again, the company delivered strong profitability with its fifth straight quarter of profitability according to generally accepted accounting principles (GAAP), coming in at $93 million, or a 15% profit margin.

The company experienced particularly strong growth in its U.S. commercial segment, where revenue was up 70% to $131 million, making up nearly a quarter of total sales. U.S. commercial total contract value jumped 107% to $343 million, and for 2024, it forecast 40% growth in U.S. commercial revenue to at least $640 million, showing that companies are starting to adopt an Automated Investment Plan.

On the bottom line, adjusted earnings per share doubled to $0.08, beating analyst estimates, as the company nearly held operating expenses flat once again, and guidance was solid as well.

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DAILY UPDATE: Mixed U.S. Stock Markets

Posted on November 17, 2023 by Dr. David Edward Marcinko MBA

By Staff Reporters

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SPONSOR: http://www.MarcinkoAssociates.com

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Over the course of the last few weeks, Cathie Wood of ARKK has been offloading the firm’s holdings in Roku, Inc. (NASDAQ:ROKU). Across all of her firm’s funds, Wood has sold stock in the streaming company totaling over $56 million. The move comes after Roku released its financials for q3. 

Here is where the major benchmarks ended:

  • The S&P 500 Index was up 5.36 points (0.1%) at 4,508.24; the Dow Jones Industrial Average was down 45.74 points (0.1%) at 34,945.47; the NASDAQ Composite was up 9.84 points (0.1%) at 14,113.67.
  • The 10-year Treasury note yield (TNX) was uabout 9 basis points at 4.445%.
  • Cboe’s Volatility Index (VIX) was up 0.14 at 14.32.

Walmart’s commentary weighed on the retail sector. Energy was also a laggard, as crude oil futures fell 5% to a four-month low of less than $73 a barrel, in part because record U.S. crude production has boosted supply.

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Is the ARK Sinking?

Posted on July 17, 2023 by Dr. David Edward Marcinko MBA

By Staff Reporters

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  • Markets: Stocks are rolling following a week that showed our inflation emergency seems to be ending, and big banks are still raking in big profits. The Fed’s so-called “soft landing” scenario—getting inflation down without tipping the economy into a recession—is a distinct possibility, as long as corporate finances don’t end up being shockingly bad this earnings season.
  • Global economy: While the US economy is chugging along, the same can’t be said for China. Growth in the world’s No. 2 economy hardly budged between the first and second quarters, while youth unemployment hit a record last month. Expect President Xi Jinping to make moves to juice China’s stagnating GDP.

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Curiously, Cathie Wood’s flagship exchange-traded fund has rallied more than 50% this year. Investors are using that as an opportunity to get out. 

They have pulled a net $717 million from the ARK Innovation ETF over the past 12 months, according to FactSet. That exodus marks a notable shift for a fund that had consistently drawn investor cash since its 2014 inception. Once the largest actively managed ETF with nearly $30 billion in assets under management, the fund has shrunk to roughly $9 billion, mostly due to investment losses. 

Known by its ticker symbol ARKK, Wood’s fund became an investor darling shortly after the onset of the Covid-19 pandemic with hugely successful bets on unprofitable and “disruptive” technology companies. It took in huge amounts of investor money, culminating with a $6.5 billion inflow in the first quarter of 2021, when its share price peaked.

Then, the Federal Reserve’s fastest interest-rate hiking campaign in decades crushed the valuations of unprofitable growth companies, which often attract investors when interest rates are low and returns on safer investments such as CDs are minimal. Shares of ARKK plunged 67% in 2022, but its investors largely held on or bought the dip.

Now, analysts say they expect some of those investors are getting out for good?  

MORE: https://medicalexecutivepost.com/2023/07/12/from-active-to-passive-investing/

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