Cathie Wood's Tech Rotation: Amazon Mega-Buy While Tesla, Reddit And Palantir Get Axed

On Thursday, Cathie Wood-led Ark Invest made significant trades, with Palantir Technologies Inc. PLTR, Tesla Inc. TSLA, Reddit Inc. RDDT, and Amazon.com, Inc AMZN taking center stage.

The Palantir Trade

Ark Invest’s move to sell Palantir shares comes amid a tumultuous day for the company. Palantir’s shares experienced a rollercoaster ride, initially dipping due to a downgrade from Jefferies, only to bounce back following an announced partnership with Amazon Web Services (AWS) and Anthropic.

Despite Jefferies analyst Brent Thill downgrading Palantir from a Hold rating to an Underperform rating due to valuation concerns, the company’s stock has seen a surge of over 220% since the start of the year. This includes a 30% increase in just the past week, largely driven by strong quarterly results fueled by “unrelenting” AI demand.

Ark offloaded 264,513 Palantir shares on Thursday through its ARK Innovation ETF ARKK and Ark Fintech Innovation ETF ARKF funds, with the transaction valued at $14.8 million based on a closing share price of $55.88.

The Tesla Trade

Ark sold 85,019 shares of Elon Musk-led Tesla Inc TSLA. Wood has been on a Tesla share-selling spree of late. The latest transaction, which came through ARKK, was valued at $25.24 million.

Wood’s firm estimates that Tesla’s driverless ride-hailing service could access an $11 trillion revenue market by leveraging low operating costs to undercut existing ride-hailing prices. Tesla plans to debut this service next year in Texas and California, starting with drivers and aiming for fully autonomous rides as regulations allow.

The Reddit Trade

Ark Invest’s trade with Reddit comes at a time when the company is making significant strides in the social media space. Reddit’s market cap recently surpassed that of Snap Inc. SNAP, reaching $21.5 billion after a 12% climb on Election Day. This is a notable achievement for the social media platform operator, which has a user base and revenue one-fourth the size of Snap’s.

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Reddit’s growing popularity as a source of authentic information is also posing a challenge to Google’s dominance in the internet search market. This trend was highlighted at a recent conference hosted by The Wall Street Journal, where a journalist revealed she primarily uses Google Search to access Reddit for information.

The Wood-led firm sold 62,389 Reddit shares from its ARK Next Generation Internet ETF ARKW fund on Thursday, a transaction valued at $8.2 million. Reddit shares closed the day 8.6% higher at $131.44.

The Amazon.com Trade

Ark Invest’s decision to purchase Amazon shares comes at a time when insiders at the e-commerce giant have been selling off their shares. According to a recent Benzinga report, Jeff Bezos, Amazon’s executive chair, recently sold 1.07 million shares of Amazon stock at $200.07 per share, raking in approximately $213.8 million. This left Bezos with 926.41 million shares of Amazon.

Bezos was not the only Amazon insider selling shares. Recently, director Jonathan Rubinstein also offloaded $1 million worth of shares, while Douglas Herrington, CEO of Worldwide Amazon Stores, sold $696,360 worth of Amazon shares.

Ark acquired 150,675 Amazon shares through its ARKK fund, a transaction valued at $31.6 million. Amazon’s stock closed Thursday at $210.16, up 1.5%.

Other Key Trades:

• Ark purchased shares of 10X Genomics Inc. (TXG) and sold shares of Moderna Inc (MRNA).
• The firm picked up shares of Illumina Inc. (ILMN), ABSCI Corp (ABSI), and Guardant Health Inc. (GH) but sold shares of Unity Software Inc. (U), Sofi Technoliogies Inc. (SOFI), and Repare Therapeutics Inc. (RPTX).

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This story was generated using Benzinga Neuro and edited by Shivdeep Dhaliwal