Famed investor Cathie Wood, known for her bold bets on technology stocks, has recently added Amazon to her portfolio, a move that has surprised some analysts.
While Wood's flagship Ark Innovation ETF saw impressive returns in 2020, its long-term performance has lagged behind the S&P 500, raising concerns about her investment strategy.
Wood's investment philosophy focuses on emerging companies in disruptive technologies, a strategy that can lead to significant gains but also comes with high volatility.
Investment research firm Morningstar has issued a scathing assessment of Ark Innovation ETF, questioning the firm's ability to consistently pick winning stocks and manage risk.
In response to criticism, Wood has defended her strategy, arguing that traditional investment analysis methods are outdated in the face of rapid technological change.
The inclusion of Amazon in Ark's portfolio is notable as the stock has already seen significant growth and is considered a blue-chip company, a departure from Wood's typical investments.
Wood has also been steadily increasing Ark's position in Reddit, indicating her confidence in the social media company's long-term growth potential despite recent losses.
Despite a net loss in the first quarter, Reddit has shown impressive user growth and revenue increase, driven by strong advertising sales, which could justify Wood's investment.
Reddit's Growth Trajectory and Financial Performance