Cathie Wood’s ARK Invest Buys More Shopify Shares, Undeterred By Slower Growth Outlook

• Wood added 255,804 Shopify shares across her exchange-traded funds portfolio. 
• In Q1, Shopify reported a 34% year-on-year increase in revenue to $3.17 billion. 
• The e-commerce company has delivered over 30% growth in the last four quarters. 

Cathie Wood’s ARK Invest ramped up its exposure in Shopify (SHOP), after carrying out a fresh wave of trades following the e-commerce company’s fiscal first-quarter (Q1) earnings. 

Woods made the purchase despite the stock tanking by more than 15% as a weak growth outlook dampened investors’ enthusiasm. 

ARK’s Confidence In SHOP

Wood added 255,804 Shopify shares across the ARK Innovation ETF (ARKK), ARK Fintech Innovation ETF (ARKF), and ARK Next Generation Internet ETF (ARKW), representing a combined position potentially worth over $32.6 million.  

The latest purchases continue a recent trend, coming just a day after ARK added over 72,000 shares of the retail platform. These repeated buys show ARK still sees Shopify as an important part of its main investment strategy.

In Q1, Shopify reported revenue of $3.17 billion, marking a 34% year-on-year increase and coming in above analysts’ expectations of $3.09 billion, according to Fiscal AI. Gross Merchandise Volume also grew strongly, rising to $100.74 billion from $74.75 billion in the same quarter last year.

The company expects Q2 revenue to grow in the high-20% range YoY. It has still delivered over 30% growth for at least four straight quarters.

Shopify stock edged 0.8% higher overnight, heading into Wednesday. 

Jefferies Sees Short-Term Growth Concerns For SHOP

On Tuesday, Jefferies analyst Samad Samana reduced the price target on Shopify to $140 from $150 while keeping a ‘Hold’ rating. The firm said that although the results were strong on an absolute basis, forward guidance points to slower growth due to tougher year-over-year comparisons, which could weigh on the stock in the short term.

Separately, Piper Sandler analyst James Callahan also lowered his price target to $150 from $165, while maintaining an ‘Overweight’ rating. 

What Are SHOP Retail Traders Saying? 

On Stocktwits, retail sentiment around the stock changed to ‘extremely bullish’ from ‘bullish’ territory the previous day. Message volume increased 325% in 24 hours. 

A Stocktwits user said, “Was a blowout quarter, nowhere does it highlight future growth will slow down. Firing on all cylinders!,” and added that “The street must have wanted it lower - only the panic sellers lose once this slingshots up in the upcoming days.”  

Another user said, “At this price it's almost guaranteed to outperform the S&P500 over the next [pick any from 1 to 10] years.” 

SHOP stock has declined by over 33% year-to-date. 

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