5 Innovative Stocks in Cathie Wood’s Portfolio That Failed to Impress

In this article, we discuss 5 innovative stocks in Cathie Wood’s portfolio that failed to impress. If you want our detailed analysis of these stocks, go directly to 10 Innovative Stocks in Cathie Wood’s Portfolio That Failed to Impress. 

5. Zoom Video Communications, Inc. (NASDAQ:ZM)

Number of Hedge Fund Holders: 48

Decline in Share Price in the Last 6 Months: 63.21%

Zoom Video Communications, Inc. (NASDAQ:ZM) is an American communications technology firm which has declined 63.21% in the last six months. Cathie Wood increased her stake in Zoom Video Communications, Inc. (NASDAQ:ZM) by 57% in Q4 2021 despite the stock sliding significantly, holding 6.8 million shares worth $1.2 billion. 

The consensus EPS estimate for Zoom Video Communications, Inc. (NASDAQ:ZM) is $1.07, down 12.3% year-over-year, and the consensus revenue estimate is $1.05 billion, gaining 19% from the prior-year quarter, as per the earnings guidance posted on February 25. 

On February 24, UBS analyst Karl Keirstead lowered the price target on Zoom Video Communications, Inc. (NASDAQ:ZM) to $130 from $250 and kept a Neutral rating on the shares ahead of its quarterly results. Despite the 35% year-to-date decline in the stock, the analyst recommends remaining on the sidelines given his concerns about U.S. market saturation, competition from Microsoft Teams, and price compression.

Tiger Global Management held a prominent stake in Zoom Video Communications, Inc. (NASDAQ:ZM) as of Q4 2021, with more than 6 million shares worth $1.12 billion. Overall, 48 hedge funds were bullish on Zoom Video Communications, Inc. (NASDAQ:ZM) in the fourth quarter of 2021, down from 56 funds in the quarter prior. 

Here is what Artisan Partners has to say about Zoom Video Communications, Inc. (NASDAQ:ZM) in its Q1 2021 investor letter:

“We concluded our campaigns in Zoom Video Communications. We have been paring our position in Zoom for several quarters, anticipating the reduced need for video conferencing as vaccination rates climb and people return to their workplaces. That said, we believe there is a strong case to be made that the pandemic has prompted a permanent inflection in video conferencing’s importance—sustainably higher remote work arrangements, more online learning and less business travel. Furthermore, the company’s dramatically expanded user base (up 485% YoY in Q3) positions it well to cross sell additional services, Zoom Phone in particular. The long-term future remains bright, but we decided to end our successful investment campaign in favor of opportunities in our pipeline with more attractive near-term growth prospects.”