Cathie Wood is known for her focus on growth stocks, particularly in areas like cryptocurrencies, electric vehicles, and technology. However, some of the stocks in her Ark Innovation ETF have been struggling this year.
Top holdings like Roku, Roblox, and UiPath have seen their stock prices drop by more than 20% in 2024. Let’s take a closer look at what’s going on with these three companies.
1. Roku:
Roku’s shares have plummeted by 40% this year, mainly due to Walmart’s plan to acquire Vizio, a competitor in the smart TV market. Additionally, Roku’s expanded product offerings may impact its profitability as margins could worsen. With operating losses and a tough road ahead, investors are understandably wary of Roku’s stock.
2. Roblox:
Roblox, a popular gaming platform, is striving to attract an older demographic to boost revenue opportunities. While the company shows promise in terms of revenue growth, it is still grappling with losses. Despite its potential, Roblox has yet to prove its profitability, leading to a 21% decline in its stock this year.
3. UiPath:
UiPath, an automation company, has seen its stock value drop by over 50% this year. The resignation of its CEO and underwhelming revenue guidance have contributed to its downfall. With increasing competition in the automation industry and a lack of profitability, UiPath’s stock may continue to struggle until it proves its worth to investors.
While these stocks may seem tempting at their reduced prices, it’s important to consider the challenges they face in returning to profitability. Investors should approach these companies with caution and be prepared for potential further declines in their stock prices.