On Wednesday, Cathie Wood-led Ark Invest purchased shares of Netflix, while continuing to trim its position in Palantir.
The Netflix Trade
Ark purchased 18,783 Netflix shares through the ARK Next Generation Internet ETF (BATS:ARKW). The trade was worth approximately $1.2 million, based on Wednesday’s closing price of $65.04.
Netflix shares fell to a 52-week low following disappointing fourth-quarter guidance.
The streaming company projected fourth-quarter revenue of $13.442 billion and earnings of 67 cents per share, below analyst estimates of $13.517 billion and 73 cents, respectively.
Third-quarter revenue rose 12% year over year to $12.874 billion, narrowly missing expectations of $12.876 billion. Earnings of 87 cents per share exceeded the consensus estimate of 82 cents.
Evercore ISI’s Mark Mahaney said Netflix needed stronger programming to improve engagement, warning that sustained weakness could eventually weigh on subscriber growth and pricing power.
Several analysts lowered their forecasts following the results. BofA Securities analyst Jessica Reif Ehrlich maintained a Buy rating but cut her price target to $90 from $105.
Morgan Stanley’s Sean Diffley retained an Overweight rating while lowering his target to $77 from $80. Rosenblatt’s Barton Crockett maintained Neutral and reduced his target to $71 from $75, while Needham’s Laura Martin downgraded Netflix to Hold from Buy.
The Palantir Trade
Ark sold 3,194 Palantir shares through the ARK Innovation ETF (BATS:ARKK). The trade was worth approximately $644,294, based on Wednesday’s closing price of $201.72.
The sale extended Ark’s Palantir trimming to three consecutive trading sessions. The firm sold 18,349 shares on Monday, worth approximately $3.6 million, and 27,790 shares on Tuesday, worth approximately $5.4 million.
Across those three sessions, Ark sold 49,333 shares, with an estimated combined value of $9.6 million, using each day’s closing price.
Separately, Charles Schwab’s George Tsilis flagged Palantir’s valuation as a key risk, saying its multiple “already prices in years of exceptional execution.”
In comments reported Tuesday, Tsilis said Palantir traded at approximately 124 times forward earnings, compared with roughly 22 times for application software peers.
Palantir’s second-quarter revenue increased 93% year over year to approximately $1.94 billion, while U.S. commercial revenue rose 149% to $764 million. Tsilis nevertheless noted that international commercial adoption had lagged the domestic business.
Other Key Trades
Pacific Biosciences of California Inc. (PACB): ARKG and ARKK purchased a combined 265,611 shares.
X-Energy Inc. (XE): ARKQ and ARKX bought a combined 200,347 shares.
Scribe Therapeutics Inc. (SCTX): Ark purchased 199,698 shares through ARKG.
Intuitive Surgical Inc. (ISRG): Ark bought 6,411 shares through ARKQ.
Oklo Inc. (OKLO): Ark purchased 42,230 shares through ARKQ.
Intuitive Machines Inc. (LUNR): Ark bought 43,539 shares through ARKX.
Personalis Inc. (PSNL): Ark sold 182,507 shares through ARKG.
Shopify Inc. (SHOP): ARKK and ARKW sold a combined 17,053 shares.
Elbit Systems Ltd. (ESLT): ARKQ and ARKX sold a combined 3,757 shares.
Amazon.com Inc. (AMZN): ARKK sold 494 shares.