Cathie Wood’s Ark Invest Sheds More Tesla Shares Ahead Q2 Earnings

Cathie Wood’s Ark Invest continued its strategic reallocation of assets on Monday, July 22. The notable transactions involved two significant technology companies: Tesla, Inc. (TSLA) and CrowdStrike Holdings, Inc. (CRWD). The moves come just ahead of the EV company’s Q2 FY24 earnings announcement as Ark shed a significant stake in TSLA stock.

Cathie Wood’s Ark Invest Divests Tesla Shares

On July 22, Ark Invest divested 14,859 shares of Tesla from its ARK Next Generation Internet ETF (ARKW), amounting to approximately $3.73 million. Moreover, this selloff was strategically timed to capitalize on TSLA stock surge. On Monday, the TSLA stock closed at $251.51, marking a 5.15% gain on the day.

Furthermore, the latest transaction follows an earlier divestment on July 3, where Ark sold $15 million worth of Tesla shares. This marked its first sale of Tesla stock in nine months. That day, Ark’s ARK Innovation ETF (ARKK) offloaded 56,425 Tesla shares valued at $13.05 million. Moreover, ARKW sold an additional 6,442 shares worth approximately $1.5 million.

These sales have sparked considerable discussion on Wall Street regarding Ark Invest’s outlook on the EV company, given that TSLA stock remains the largest holding in Ark’s portfolio. The recent offloading of Tesla shares, totaling around 77,726 shares, is seen as a strategic move ahead of the company’s Q2 earnings report. This indicates that Cathie Wood’s Ark Invest might not be bullish on the EV giant’s earnings scheduled for later today.

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Ark Buys The Dip In CrowdStrike

In contrast to its divestment in Tesla, Ark Invest has been actively buying the dip in CrowdStrike Holdings. On July 22, Ark Invest acquired 13,574 shares of CrowdStrike for ARKW, worth approximately $3.58 million. Additionally, it added 6,645 shares worth $1.75 million.

This buying activity follows a significant investment on the previous Friday. At the time, Cathie Wood-led Ark Invest bought $12 million worth of CRWD shares after a major CrowdStrike outage. Despite this aggressive buying, CrowdStrike’s stock continued to decline, with Ark Invest losing $1.6 million on its position as the stock plummeted 13.4% on Monday.

Tesla Q2 Earnings Expectations

As the second-quarter earnings season begins, Tesla’s upcoming report is highly anticipated. Wall Street analysts predict the company will report revenues of $24.7 billion for Q2, reflecting a year-over-year decline of 0.9%. This decrease is largely attributed to a drop in deliveries, marking the first time in a decade that Tesla’s deliveries have fallen for two consecutive quarters.

Although deliveries exceeded expectations, the decline underscores the challenges Elon Musk‘s Tesla faces in maintaining its growth trajectory. Furthermore, analysts also expect a significant impact on the tech giant’s earnings per share (EPS). They projected a 41% year-over-year drop to $0.46.

This decline is partly due to multiple vehicle price cuts over the past couple of years. Though the price reductions boosted sales, they have negatively affected tech giant’s margins. Moreover, recent offloading from Cathie Wood’s Ark Invest suggests a bearish outlook as well.

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