Cathie Wood has some ground to make up this year. The co-founder, CEO, and ace stock picker for Ark Invest is still trailing the market. Her most popular aggressive growth exchange-traded fund is trading just 3% higher in 2024, well shy of the overall market averages. She’s not standing still.
Wood boosted her existing stakes in Amazon (NASDAQ: AMZN), Archer Aviation(NYSE: ACHR), and Joby Aviation (NYSE: JOBY) on Thursday. Let’s take a closer look at three of the 13 stocks that she was buying on Thursday.
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The country’s largest online retailer has China on its mind these days. Bloomberg is reporting that the U.S. House Select Committee that’s looking into strategic competition between the two countries recently called in Amazon staffers to testify about the e-tailer’s shopping partnership with the Chinese-owned TikTok.
On a more positive note, Amazon also launched Haul in beta version this week. The new platform that rolled out within the updated Amazon app offers a low-frills shopping experience loaded with deeply discounted merchandise. Most of the items on Haul cost less than $10. It’s a shot to compete against rivals Shein and PDD Holdings‘ Temu, two Chinese rivals that are wooing stateside customers with unbelievably low prices.
Image source: Getty Images.
Will Haul work too well? As a brand that U.S. consumers know and trust, Haul’s likely quicker fulfillment, and the looming trade disputes and potential tariffs, it’s easy to see why the platform could be a hit. Will its potential success come at the expense of Amazon’s traditional storefront that likely carries higher margins? It’s certainly something to watch out for, as Amazon is growing a lot slower than Shein and Temu. Overall net sales for Amazon rose 11% in its latest quarter, but its domestic e-commerce revenue rose just 9%. Temu parent PDD doesn’t report third-quarter results until next week, but it did see its top line soar 86% in its previous quarterly update.
If someone is going to disrupt Amazon it may as well be itself. There’s more to Amazon than just selling stuff online. Its popular cloud-hosting business, Amazon Web Services (AWS), is posting double-digit growth. Earnings per share soared 52% in its latest quarter. With the potent holiday shopping season coming up, Haul bears watching. Amazon’s guidance calls for just 7% to 11% in net sales growth for the fourth quarter. We’ll see if Haul is a hit, a failure, or a hit that cannibalizes Amazon’s traditional storefront soon. Wood naturally likes Amazon’s chances. She’s been building up her stake in Amazon in recent weeks.
Wood is a believer in the nascent field of next-gen short-distance air travel. Archer is hoping to carve out an early leadership position in electric vertical takeoff and landing (eVTOL) aircraft, transporting well-to-do customers from major airports to the heart of densely populated cities with lightweight aircraft that can get to desired destinations a lot faster than traffic-clogged alternatives.
Archer shares are down 30% in 2024, but the stock did more than triple last year. Put another way, the stock has more than doubled since the start of last year. Archer is a pre-revenue company, but it has partnerships lined up and the potential to be a portfolio game changer for patient investors. Like most stocks that have yet to generate revenue, it’s also risky.
The stock tumbled 8% on Wednesday after Archer announced that it would be selling $70 million worth of stock. It’s an odd reaction, since $70 million is less than 4% of Archer’s current market cap. Wood likely saw an opportunity in the sell-off.
Let’s keep things in the air by closing out this list with Joby Aviation. It’s another early-stage provider of air-taxi services, and with a $4.5 billion market cap it’s the most valuable publicly traded player in this niche.
The eVTOL market has its ups and downs, and Joby is following a somewhat similar trajectory as Archer. The stock nearly doubled in 2023, but it’s losing to the market with an 11% slide this year. Like Archer, it has a cash-rich balance sheet to help ride out the near-term losses until it literally and figuratively gets off the ground.
Joby has been making some encouraging headlines internationally in recent weeks. However, as is the case with Archer, investors will have to be patient to see the industry go mainstream.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Rick Munarriz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy.
