Tesla and CrowdStrike plummet, with most tech stocks being heavily bought by Cathie Wood
Tesla and CrowdStrike's stock prices plummeted, prompting investor Cathie Wood to make significant purchases. As an innovative investor at Ark Invest, Wood bought these two stocks after the sell-off of Tesla and CrowdStrike. Wood remains optimistic about Tesla, expecting the company's market value to exceed $8 trillion by 2029. Additionally, CrowdStrike experienced a significant drop in stock price due to a faulty update that caused a global outage. Wood is facing challenges this year with poor performance and outflows of funds, but she remains confident in innovative stocks
Cathie Wood of Ark Invest quickly bought Tesla (TSLA) and CrowdStrike (CRWD) after recent sell-offs, doubling down on her favorite tech stocks.
The prominent investor increased her stake in Tesla by 33,143 shares for the ARK Next Generation Internet ETF (ARKW) on Wednesday, as the electric car company dropped 12% in the previous trading day following lower-than-expected second-quarter results.
Last month, as a major Tesla bull, Wood updated her price target for TSLA, expecting Tesla to reach $2600 by 2029, surpassing a market cap of over $8 trillion. In comparison, Apple's market cap is around $3.4 trillion.
Wood is bullish on Tesla's future robotaxi business, believing that by 2026, this business will contribute over 50% of the company's expected value.
Just a few days ago, after a global outage caused by CrowdStrike led to millions of Microsoft Windows devices crashing, Wood also bought shares of the company.
Ark Invest bought 38,595 shares of this cybersecurity software company on Friday and added 20,219 shares on Monday. Due to an erroneous update of CrowdStrike's Falcon vulnerability protection software, causing crashes of PCs, data center servers, and displays, leading to flight cancellations and medical appointment cancellations, the stock saw double-digit declines on both days.
Wood is facing a dual challenge of poor performance and investor outflows this year. According to FactSet data, her flagship fund Ark Innovation ETF (ARKK) has dropped over 14% this year and experienced outflows of over $2 billion.
In a recent letter to clients, the investor acknowledged the poor performance while reaffirming confidence in innovative stocks, believing that with easing inflation and declining interest rates, innovative stocks will perform better.
"As an investor in our funds, I understand that volatility can be frustrating and unsettling," she said in the letter. "Recognizing that the macro environment and some stock selections have posed challenges to our recent performance, I want to convey that our confidence and commitment to investing in disruptive innovation remain unwavering."
She added, "As an investor in our funds, I understand that volatility can be frustrating and unsettling. I fully recognize that the macro environment and stock selection have posed challenges to our recent performance. I want to discuss why our belief and commitment to investing in disruptive innovation remain steadfast."