The widely followed growth investor keeps making moves.
Growth stocks are rallying lately, and that’s welcome news to Cathie Wood. The CEO, co-founder, and top stock picker at Ark Invest is at her best when the market’s hungry for disruptive speedsters. She publishes her transactions at the end of every trading day, giving us a good look at what she’s buying and selling.
She kicked off this week in a mood to go shopping. Wood added to her existing positions in The Trade Desk (TTD 2.70%), Meta Platforms (META 0.10%), and Taiwan Semiconductor (TSM -0.24%) on Monday. Let’s look at a closer look at her latest purchases.
The Trade Desk
Advertising has come a long way, and The Trade Desk is a leader championing the change. The Trade desk is the leading player in demand-side programmatic advertising, giving marketers the tools they need to lean on algorithmic splendor to manage digital advertising campaigns.
The Trade Desk stock has soared 68% this year, a feat that may seem surprising for an ad specialist. The market for marketing missives has weakened since the second half of last year as rate hikes and inflationary pressures have spurred fears of a global recession. If you want to clear advertisers’ desire to spend money fast just propose an operating climate where consumers aren’t comfortable parting with their hard-earned money.
Business is slowing at The Trade Desk, but it’s still well positioned to post another year of double-digit revenue growth in 2023. Its top line rose 21% through the first three months of this year, and analysts feel that it will deliver similar growth for the balance of 2023.
The Trade Desk continues to gain market share, holding up considerably better than the ad market in general. Good things happen when you’re leading the charge in a shift away from traditional ad-serving outlets in the direction of new digital platforms. The Trade Desk also posted a better-than-expected profit for the third quarter in a row.
Meta Platforms
Meta has been one of this year’s biggest surprises. The social media giant behind Facebook, Instagram, and WhatsApp has more than doubled this year, up 125% so far in 2023.
The shares have skyrocketed despite posting a decline in revenue for all of last year. The good news is that after three consecutive quarters of year-over-year declines it did shift back to revenue growth in the first quarter of this year. Sure, it was just a mere 3% year-over-year ascent on the top line. It was still a welcome surprise, and the year-over-year comparisons will get kinder at this point as it stacks up against those three revenue declines in the final three quarters of last year.
However, this is also the year that Meta’s Quest mixed-reality headset will face its biggest challenge as the world’s most valuable consumer tech company, Apple, puts out its $3,500 Vision Pro headset. Meta is a regulatory risk given its breadth, with its audience of more than 3.7 billion monthly active users. Thankfully it’s been able to deliver healthy profitability as a result of dominating the world of social networking.
Taiwan Semiconductor
Cathie Wood has been buying hard-hit stocks on dips this year, but on Monday she was adding to many of this year’s big winners. Taiwan Semiconductor stock is up 44% year to date, far from the upticks that The Trade Desk and Meta have delivered but soundly trouncing the market in 2023.
The world’s largest semiconductor foundry has benefited from recent global demand. Sales turned positive in May after declining in March and April. Taiwan Semiconductor is also gaining momentum from surging interest in artificial intelligence. You need chips to make AI take off, and Taiwan’s not the world’s top dog in that market by accident. There’s even a 1.7% dividend, a rarity in Wood’s realm of early-stage growth stocks.
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