Cathie Wood seems to always be making moves in the market. The founder and CEO of Ark Invest posts her trades at the end of each trading day, and that gives us all a great way to track one of the most followed growth investors. He’s had some tough years along the way, but his returning monster in 2020 and 2025 can’t be ignored.
It only added to a couple of its existing positions on Monday. Ark Invest bought shares of MercadoLibre(NASDAQ: MELI), Intellia Therapeutics (NASDAQ:NTLA)and Generate Biomedicines(NASDAQ:GENB) to start the new business week. Let’s see if you should follow Wood in these volatile growth stocks.
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Latin America’s leading e-commerce and fintech play has lost a third of its value since peaking last summer. A mixed financial report last week didn’t help MercadoLibre stock.
At first glance, it posted solid results in the fourth quarter. The top line numbers were great. Net income and financial income increased 45% to $8.8 billion, an increase of 47% on a currency-neutral basis. Gross merchandise volume for its e-commerce segment increased 37%. The total payment volume for its MercadoPago platform, the leader on the continent, increased by 42%. These results far exceeded market expectations.
The story begins to unravel as it moves down the income statement. MercadoLibre’s operating profit increased just 8%, held back by a 50% increase in operating expenses. Reported net income also declined, marking the third consecutive quarter in which MercadoLibre missed Wall Street’s profit targets.
At least seven major analysts cut their price targets following Tuesday afternoon’s financial update. There’s a pretty sweet silver lining to that universal markdown. Even the lowest of those revised price targets, $2,400, is 35% higher than the price at which the stock closed on Monday.
There are some concerns about near-term margins and things are unlikely to improve in 2026. MercadoLibre faces competitive challenges in Brazil, forcing it to invest aggressively to grow. Drastically reducing its minimum orders for free shipping in that country last year was one of a series of measures that left their mark. Like many American leaders in consumer technology, MercadoLibre is also making significant investments in big technologies to stay ahead of its smaller rivals. The strategy is sound, but it comes with the downside that near-term earnings estimates have fallen lower since last week.
Wood is a fan of several gene editing actions. Lately he has been especially fond of Intellia Therapeutics. In each of the last three trading days, he bought shares of the developer of next-generation treatments based on CRISPR therapies.
Intellia is volatile. The stock has nearly doubled from its December low, rising another 12% on Monday after the announcement of a positive development: The U.S. FDA has lifted its clinical hold on an investigational new drug application for the treatment of patients suffering from transthyretin amyloidosis with cardiomyopathy. The previous suspension came during the critical Phase 3 clinical trial of the potential treatment, so it’s naturally good news to see the trials moving forward again.
Despite the recent rise, shares are still trading at just over half of Intellia’s October highs. I mentioned that the stock was volatile. Losses should continue for years to come, but its balance sheet is flush with cash.
Artificial intelligence has become a polarizing topic, but few would oppose its use to help bring about medical advances. Generate Biomedicines is a clinical-stage generative biology company that uses machine learning to program new protein therapies in the pursuit of drug discovery and development. A long-acting treatment in development aims to treat severe asthma with a single dose every six months.
If you’re not familiar with Generate Biomedicines, that’s understandable. It was made public on Friday of last week. And things have not gone well. It was able to raise $400 million in gross revenue by going public at $16. The stock opened at $15, to close at $12.91 on its first day of trading. Shares closed at $12.33 on Monday, falling 23% during their first two days on the market. Wood has been a buyer on both days.
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Rick Munarriz has no position in any of the securities mentioned. The Motley Fool has positions and recommends Intellia Therapeutics and MercadoLibre. The Motley Fool has a disclosure policy.
Cathie Wood Hunts for Bargains: 3 Stocks She Just Bought was originally published by The Motley Fool
