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War, Inflation, Fed Hawkishness, Elon Musk’s Twitter Buy: How These Factors Weighed On Cathie Wood’s Top Holdings In 2022 – Tesla (NASDAQ:TSLA), Zoom Video Comms (NASDAQ:ZM)

ByBhavik Nair

Jan 2, 2023
War, Inflation, Fed Hawkishness, Elon Musk's Twitter Buy: How These Factors Weighed On Cathie Wood's Top Holdings In 2022 - Tesla (NASDAQ:TSLA), Zoom Video Comms (NASDAQ:ZM)

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In 2022, financial markets witnessed one of the worst routs in history, dragged by the war in Ukraine, rising inflation and subsequent hawkish policies deployed by central banks.

What Happened: Pessimism was so rampant that it dragged the Dow Jones by over 9% and the S&P 500 by over 19%. In the same period, the tech-heavy Nasdaq Index plunged over 33%.

However, funds run by Cathie Wood’s Ark Investment Management declined much more than any of these indices in the said period.

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The flagship ARK Innovation ETF ARKK lost over 68% while the ARK Autonomous Technology & Robotics ETF ARKQ declined by over 48%. The ARK Next Generation Internet ETF ARKW fell over 68% while the ARK Genomic Revolution ETF ARKG fell over 55%.

With such a decline in the funds’ performance, it becomes imperative to analyze how some of Wood’s top holdings have performed this year. Here’s how some of the top holdings among Wood’s funds scored in 2022:

1. Exact Sciences Corp EXAS: The molecular diagnostics company specializing in the detection of early-stage cancers is the top holding of Wood’s funds. Ark cumulatively holds over $804 million of the stock through two different funds, according to data available on Ark’s website at the time of writing. The stock has lost over 38% since the beginning of the year.

Interestingly, in the last one week, Ark’s funds have offloaded more than 510,000 shares of Exact Sciences, which, based on Friday’s closing price, amount to over $25 million.

2. Zoom Video Communications Inc  ZM: Shares of the technology company have lost over 64% since the beginning of the year. At the time of writing, Ark held over $645 million in Zoom’s shares via two different funds with the stock being the second largest holding among Wood’s funds.

In November, Ark Invest analyst Will Summerlin had said in a report that Zoom Video’s stock could skyrocket to $1,500 in 2026, compounding at an annual rate of 76%. The valuation was based on the fund’s open-source research and model. By 2026, Ark expects at least one person on any Zoom call to be a paying user, with enhanced Zoom functionality. In bear- and bull-case scenarios, about 20% and 80%, respectively, will convert to paying users by 2026, according to the firm.

3. Tesla Inc. TSLA: No matter what Wall Street thinks about Tesla stock, the EV-maker has always found a big supporter in Wood. Tesla shares, which witnessed a significant plunge in the last one month following its CEO Elon Musk’s acquisition of Twitter, have lost over 30% since end-November. The stock is the biggest loser amongst the top three holdings of Ark, having declined over 69% since the beginning of the year.

Despite the recent plunge, Ark has scooped up Tesla shares relentlessly. Since mid-December, Wood’s funds have loaded up over 189,000 shares of the EV-maker at an estimated valuation of over $23 million, based on Friday’s closing price.

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Image and article originally from www.benzinga.com. Read the original article here.