Stocks & Funds

Cathie Wood Goes Bargain Hunting: 3 Stocks She Just Bought in August 2023

Cathie Wood Goes Bargain Hunting: 3 Stocks She Just Bought in August 2023

In this article, we will look at 3 Stocks Cathie Wood Bought in August 2023. Before jumping to those stocks, let us have a brief background.

Cathie Wood is the Chief Executive Officer and Chief Investment Officer of ARK Investment Management LLC. With experience spanning across 40 years in identifying and investing in innovation, she founded ARK with a sole focus on disruptive innovation and added new dimensions to research. ARK’s thematic investment strategies focus on market capitalizations, sectors, and geographies to narrow down to companies which should become leaders, enablers, and beneficiaries of disruptive innovation. The article titled “3 Stocks Cathie Wood Bought in August 2023” will focus on these strategies.The company’s strategies focus on delivering long-term growth with low correlation to traditional investment strategies. Because of its open research process, the company plans to identify companies that tend to lead and benefit from cross-sector innovations including artificial intelligence, robotics, energy storage, DNA sequencing, and blockchain technology. 

Cathie Wood kicked off 1H of the year strongly, but aggressive investing style of the CEO did not pay off as expected. That being said, her sole focus remains on outperforming market in the long-term and her picks never disappoint the investors. 

In August 2023, she increased her stakes in UiPath, Ginkgo Bioworks and Archer Aviation. 

1. UiPath, Inc.

The company develops end-to-end platform offering automation with user emulation at its core. Platform helps employees throughout the company to address variety of use cases, from simple tasks to long-running, complex business processes. It generates revenue from sale of licenses for its proprietary software, maintenance and support, and professional services. The company’s fiscal 1Q24 results exhibit focus on enabling growth at scale and improving profitability as it expanded operating margin and improved cash flow for 2nd consecutive quarter. Since the company is a leader in AI-powered automation, customers continue to partner with UiPath to harness combination of generative AI and automation in enterprise-grade platform. 

UiPath, Inc. ranks 1st in the list of “3 Stocks Cathie Wood Bought in August 2023.”

Revenue of the company came in at $289.6 million grew by 18% year-over-year. ARR of the company was $1.249 billion, increasing 28% year-over-year. Net new ARR was $45.0 million. Dollar-based net retention rate was 122% and GAAP gross margin was 85%. Non-GAAP gross margin came at 87%. 

DA Davidson initiated the coverage on the shares of UiPath in a report dated 20th April. The company issued “Neutral” rating and gave the price target of $16.00. Finally, Wells Fargo & Company reduced the rating on the shares of UiPath from an “Overweight” rating to an “Equal weight” rating. It gave the target price of $20.00 for the company’s shares in report dated Friday, June 9th. 

2. Ginkgo Bioworks Holdings, Inc.

The company continues to build platform to allow customers to program cells as easily to program computers. Platform of the company is market agnostic and enables biotechnology applications throughout diverse markets, from food and agriculture to industrial chemicals to pharmaceuticals. Its 2Q was a record one on several dimensions, as it launched more programs than ever and it saw strong output from its Foundry.

The company’s investments tend to focus on making biology more like an engineering discipline and such investments are paying off. The company’s Biosecurity segment saw revenues of $35 million in 2Q. As COVID-19 public health emergency ended in the US during 2Q, Biosecurity revenue shifted away from COVID-19 testing programs in schools and communities to a more recurring model focused on long-term biosecurity infrastructure. 

It saw 2Q23 total revenue of $81 million, exhibiting a decline from $145 million in the comparable prior-year period. This shows a decline of 44% mainly because of the expected ramp down of K-12 testing in Ginkgo’s Biosecurity segment. 

The company targets 100 new cell programs to the Foundry platform in 2023 and projects total revenue of $245 million – $260 million. Ginkgo Bioworks Holdings, Inc. revised its projection for Cell Engineering revenue to $145 million – $160 million in 2023. 

Apart from Ginkgo Bioworks Holdings, Inc., Archer Aviation is another stock in the list of 3 Stocks Cathie Wood Bought in August 2023. 

3. Archer Aviation Inc.

The company advances benefits of sustainable air mobility. It continues to create electric airline which moves people throughout cities in a quick, safe, sustainable, and cost-effective manner.

It has secured $215 million investment, including Stellantis, Boeing, United Airlines, and ARK Investment Management LLC, increasing the company’s total funding to date to more than $1.1 billion, enabling its path to FAA certification and commercial operations in 2025. 

Archer Aviation Inc. ranks 3rd on our list of 3 Stocks Cathie Wood Bought in August 2023.

For 3Q, the company projects GAAP total operating expenses in the range of $42 million – $52 million and non-GAAP total operating expenses of between $75 million – $85 million. This exhibits total of $26 million expected stock-based compensation, warrant expense and other non-cash charges, and one-time non-cash credit of $59 million because of reversal of an unrealized expense related to founder equity grants.

Adjusted EBITDA loss of the company for 2Q came in at $76.3 million, that decreased by $2.7 million from adjusted EBITDA loss of $79.0 million in 1Q23, and grew $27.1 million year-over-year from adjusted EBITDA loss of $49.2 million in 2Q22. The company closed 2Q with $407.6 million in cash, cash equivalents and short-term investments, exhibiting reduction of $42.3 million from 1Q23 and decrease of $247.2 million from 2Q22, mainly because of funding for operating and capital expenses. 

In 2Q23, the company drew down $25.0 million of $150.0 million available strategic funding committed by Stellantis. 

Canaccord Genuity Group initiated coverage on shares of Archer Aviation on June 9th. They gave a “Buy” rating on the stock with the price objective of  and a $9.00 target price on the stock.

The Manufacturers Life Insurance Company grew position in the company by 17.6% in the 4th quarter. It now owns 60,441 shares of the company’s stock worth $113,000 post the purchase of an additional 9,054 shares in previous quarter.

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