Cathie Wood saw her investments rally in the second half of 2024 after a slow start. The co-founder, CEO, and primary stock picker for Ark Invest is hoping to jump ahead of the market early this year. Ark kicked off the first full trading week of 2025 by making some moves.
Wood added to her existing stakes in Amazon (AMZN -2.42%), GitLab (GTLB -1.61%), and Pacific Biosciences of California (PACB 0.50%) on Monday. Let's take a closer look at Ark's latest purchases.
1. Amazon
The leading online retailer may not seem like a bargain. Amazon stock hit an all-time high last month. The shares soared 44% last year, 4 times the 11% advance in net sales that it has posted through the first nine months of 2024. However, recent analyst notes suggest that Amazon is moving even higher.
Scott Devitt at Wedbush raised his price target on the e-tailer from $250 to $260, tapping it as a top pick for the new year. Amazon's top line may not seem very impressive, especially with its own guidance calling for net sales growth to slow to 7% to 11% for the holiday quarter that came to a close last week. However, Devitt's eyeing widening margins at Amazon. He's modeling a 24% jump in operating profit at Amazon in the year ahead, faster than some of the other members of the "Magnificent Seven" stocks.
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Devitt's new price target of $260 implies 14% of upside from current levels. It's a modest amount of upside, but the Wedbush analyst didn't set the high-water market of 2025 updates. Shweta Khajuria at Wolfe Research boosted her price goal on the shares to $270 late last week, 19% higher than where the stock currently rests. Amazon may not seem cheap, but Khajuria sees expectations inching higher through 2025 as bullish catalysts kick in. Devitt is encouraged by Amazon's momentum. Its workhorse Amazon Web Services (AWS) cloud-hosing business has delivered accelerating sales growth for four consecutive quarters.
Amazon's annual net sales growth has failed to crack 12% in each of the last three years. Analysts see more of the same in 2025, but this should continue to be a bottom-line growth story.
2. GitLab
Like Amazon, GitLab has inched higher in each of the first three trading days of 2025. Unlike Amazon, GitLab investors saw their stock experience a 10% decline in the otherwise buoyant 2024. It doesn't mean that the provider of cloud-based software development tools has fallen out of favor.
At least 16 analysts boosted their price targets on GitLab after it posted better-than-expected financial results. It was a "beat and raise" performance. Revenue growth of 31% for the fiscal third quarter it posted in early December may be less than half the pace it was running it at two years ago, but it handily topped Wall Street pro projections. It also exceeded analyst earnings estimates by 44%, stretching its streak of better than 40% bottom-line beats to five consecutive reports. It also raised its guidance for the full fiscal year, implying that its current quarter is also trending ahead of where the market pros are perched in forecasting GitLab's fiscal fourth quarter.
GitLab also tapped Bill Staples to be its new CEO last month. He replaces co-founder and CEO Sid Sijbrandij, who is taking a step back from day-to-day operations for health reasons.
3. Pacific Biosciences of California
If GitLab investors feel that 2024 was a disappointment, Pacific Biosciences of California shareholders are saying "hold my lab equipment." Shares of the long-read gene sequencing leader plummeted 81% last year. Put another way, the stock would have to be a five-bagger from here just to get back to where it was at the start of last year.
Wood has been a buyer of Pacific Biosciences of California -- PacBio for short -- all the way down. There's no denying the long-term potential of gene sequencing to help improve medical outcomes. However, this has also become a highly competitive industry. Revenue growth has turned negative through the first three quarters of 2024. A summertime acquisition failed to turn bearish sentiment around.
Losses continue to narrow, and revenue growth should bounce back in 2025. Wood is a believer, even if buying on the way down isn't a good look until a stock truly turns things around.
