- The ARK Innovation ETF (NYSEARCA:ARKK) has purchased more than 100,000 shares of Zoom (NASDAQ:ZM) this week
- ZM stock is now ARKK’s most prominent holding, beating out even Tesla (NASDAQ:TSLA)
- Zoom makes up about 9% of the fund’s total holdings
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Cathie Wood’s flagship Ark Innovation ETF has a new top dog in its holdings: Zoom. ZM stock is more than 3% the green today after Wood’s latest newsworthy investment in the company.
Despite a rocky year for the stock market — and an even worse year for Wood’s tech-centric investment management firm — Wood continues to make plays to enhance Ark’s holdings. Many of the early pandemic favorites that bolstered ARKK in 2020 and part of 2021 have since taken turns for the worse. This includes Roku (NASDAQ:ROKU) and Zoom, which are each down 70% or more in the past 12 months.
Despite this, Wood continues to buy more. In fact, as per a recent Zoom investment, the video-chatting app has become ARKK’s single largest holding with a fund weight of 9.06%. On May 23 and 24, ARKK purchased about 99,000 shares and 19,000 shares, respectively. ZM stock now even outpaces Tesla, a notorious ARKK favorite. Clearly, Wood is long on the currently struggling communications company.
Wood Goes All In on ZM Stock Despite Sinking Fund Value
It seems Wood’s recent interest in Zoom has proven to be a catalyst for ZM stock; shares saw mild gains on both Monday and Tuesday following the purchases. Today, Zoom is also in the green. This hasn’t generally been the story for the popular video-calling platform. ZM is down more than 45% year-to-date (YTD), approaching its pre-pandemic level.
ARKK’s investment is clearly a long-term bet on growth, something the fund manager has championed amidst the greater market downturn. As other traders reallocate their investments into safer assets like Treasury bonds, commodities and value stocks, Wood has a more “disruptive” approach.
With that said, it will likely be some time before ARKK investors see the promise behind this investment strategy. Currently, ARKK is down about 55% year-to-date. Meanwhile, the S&P 500 is down roughly 17% over the same period. Whether Zoom can be the golden horse to carry ARKK back into fortune and favor remains to be seen.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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