Cathie Wood, CEO and founder of Ark Invest, says she invests on a five-year time horizon, betting big on speculative growth names such as Tesla, Roku, Zoom Video Communications, Exact Sciences and Shopify. But in 2022 at least, Ark's 10 biggest holdings plunged.
Exact Sciences was the biggest holding across Ark Invest's various ETFs at the end of 2022, followed by Zoom Video Communications, UiPath, Square-parent Block and Tesla. Roku, Shopify, Teladoc Health, Twilio and Beam Therapeutics round out Cathie Wood's 10 largest stock positions.
| Company | Ticker | 2022 change | Vs. all-time high |
|---|---|---|---|
| Exact Sciences | EXAS | -36.4% | -69.0% |
| Zoom | ZM | -63.2% | -88.5% |
| UiPath | PATH | -70.5% | -85.9% |
| Block | SQ | -61.1% | -78.3% |
| Tesla | TSLA | -65.0% | -70.3% |
| Roku | ROKU | -82.2% | -91.7% |
| Shopify | SHOP | -74.8% | -80.3% |
| Teladoc Health | TDOC | -74.2% | -92.3% |
| Twilio | TWLO | -81.4% | -89.3% |
| Beam Therapeutics | BEAM | -50.9% | -71.8% |
EXAS stock was 2022's best performer of these big Ark holdings, and it was still down 36.4%. Roku stock was the laggard, plunging 82% in 2022. Tesla stock tumbled 65%, just exceeding the average decline of 66%.
The Dow Jones retreated 8.8% in 2022, the S&P 500 slumped 19.4% and the Nasdaq tumbled 33.1%. It was their worst annual performances since 2008.
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Teladoc Leads Ark Declines From All-Time Highs
All of Ark Invest's top 10 stocks were down even more from their record highs set in 2020 or 2021. Roku stock has crashed 92% from its February 2021 peak. Exact Sciences is off 69% from all-time levels in January 2021. Tesla stock is 70% below its November 2021 top.
On average, these 10 top Ark Invest holdings are off nearly 82% from all-time highs.
Cathie Wood Adds To Losers
Cathie Wood and Ark Invest didn't buy right at the top on all these stocks. She prefers to buy on weakness and sell on strength.
She substantially whittled down Ark Invest's Tesla stake was closer to record highs, though she has been buying shares aggressive in recent weeks as the EV giant has plunged.
Still Tesla stock is the only winning position in Cathie Wood's top 10 holdings.
Over the past year, Wood has added to Roku, UiPath stock and several others in the past year following big sell-offs.
In 2020 and into 2021, word of Cathie Wood taking a new or bigger position in a stock would trigger a big advance the next day. But no longer.
Cathie Wood's 10 largest holdings account for nearly 45% of Ark Invest's total holdings, with Exact Sciences above 7%. ZM stock is nearly 6%, while Tesla close to 5%. Ark owns just 0.13% of megacap Tesla stock, but nearly 12% of BEAM stock and 11% of TDOC stock. Wood also owns roughly 9% of Roku and UiPath.
Tesla Profitable, But Many Money-Losing Ark Invest Stocks
Tesla earnings are strong and still growing rapidly, but it's an outlier among Cathie Wood's big Ark Invest holdings. Zoom Video and Square are profitable, though earnings are declining sharply in 2022. Shopify and UiPath are seen reporting slim profits or losses.
Roku, Exact Sciences, Teladoc and Beam Therapeutics are expected to report big losses in 2022 and 2023.
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Ark ETFs Plunge
Cathie Wood's flagship ARK Innovation ETF dived 67% in 2022 and 80.4% from its February 2021 top. On Dec. 28, ARKK hit a five-year low. The Ark Genomic Revolution ETF is just above June's two-year low while the Ark Fintech Innovation ETF has been hitting record lows.
Some of these top 10 Ark holdings may mount a comeback, recovering their massive losses and going on to much-higher peaks. But many may not. These companies are in cutting-edge fields, from EVs to automation to telemedicine and gene editing. But that doesn't necessarily mean these particular companies and stocks will lead the way, even on a Cathie Wood-style time horizon.
Please follow Ed Carson on Twitter at @IBD_ECarson for stock market updates and more.
