An active growth fund investor was busy on Thursday expanding his current positions.
For Cathie Wood, volatility can actually be an ally. As the co-founder and CEO of Ark Invest, she’s known for executing her most notable trades during tumultuous market days. On Thursday, amid a downturn that saw many growth stocks struggling, Wood took the opportunity to add to some of her holdings.
She purchased shares of Archer Aviation, DoorDash, and Tempus AI, all of which saw declines between 7% and 17% by the end of the day. It’s interesting to consider why she chose these particular stocks during such a rough time.
1. Archer Aviation
Wood appears unfazed by investing in emerging technologies, even if the early leaders in those sectors aren’t quite turning a profit yet.
Archer Aviation stands out in the realm of short-haul air travel. Their electric vertical takeoff and landing (eVTOL) aircraft are designed to transport affluent passengers from major airports directly to busy urban centers. There are even plans to utilize these aircraft for military operations. Their signature model, the Midnight, accommodates four passengers along with a pilot for flights of up to 100 miles.
Investors in Archer are aware of the stock’s ups and downs. After enjoying a significant rise this year—more than tripling—it’s unfortunately experienced a drop of 9% recently. Although Archer is still in its pre-revenue phase, it has secured contracts in the U.S. and overseas. Sales are anticipated to be around $80 million next year but are expected to surge over $1 billion by 2028. Meanwhile, losses are likely to be substantial, although the company has managed to build a liquidity buffer of around $2 billion.
Though not widely recognized outside investment circles, Archer Aviation is likely to gain more attention soon. They’ve secured a role as the official air taxi provider for the 2028 Los Angeles Olympics and have recently made headlines with a $126 million cash purchase of Hawthorne Airport, located just a stone’s throw from LAX.
While the immediate market might seem limited, early tech ventures often face such perceptions before unveiling their true potential. By investing in Archer, it seems Wood is confident in this next wave of air travel innovation.
2. DoorDash
Many stocks faced steep declines on Thursday, with DoorDash being a notable casualty, losing 17% after releasing mixed third-quarter results. As one of the leading names in restaurant delivery, DoorDash continues to expand its audience and service offerings.
Despite seeing total orders increase by 21% this quarter—reaching 776 million—it appears those gains weren’t enough to satisfy investors. The company reported a significant rise in sales, but it fell slightly short of analyst expectations. Investors are wary, especially given previous years of slowing growth. While DoorDash is expected to continue its expansion, the increased investment needed for maintaining its competitive edge spooked some investors, leading to the stock’s sharp drop. Wood, however, doesn’t shy away from buying when others are panicking.
3. Tempus AI
With only 45 stocks surpassing a 100% increase this year, Tempus AI stands out among them. This company focuses on providing advanced applications in healthcare. However, despite its impressive performance since going public last June, it has faced a 20% drop in share price in just the beginning of this week.
Tempus AI’s latest quarterly figures show an 85% increase in sales, buoyed by the recent acquisition of Ambry. Even as growth in oncology and genetic testing increased by 33% during the quarter, the market reaction this week suggests that investors were looking for more. Nevertheless, for Wood, the chance to acquire Tempus AI at a discount after a year of strong performance was simply too good to pass up.
