We recently compiled a list of the 10 Tech Stocks to Sell Now According to Cathie Wood. In this article, we are going to take a look at where Camtek Ltd. (NASDAQ:CAMT) stands against the other tech stocks.
In an industry known for hedge fund managers who focus on unique strategies, including quantitative trading and value stocks, Cathie Wood and her hedge fund ARK Investment Management set themselves apart by purely focused on buying shares in emerging, innovative companies in fields such as AI, Blockchain Technology, Multi-Omics, Space Exploration, and Energy Storage. The fund saw one of its best years since its launch in 2017, with an impressive 87.4% gain driven by a 1300% increase in Grayscale Bitcoin Trust. This performance occurred while the price of Bitcoin hit a record high of $20,000.
Although her funds have gained recognition for their strategies, they have also had a range of outcomes, with some analysts describing them as rollercoaster rides. While creative, market analysts highlight a significant issue with the hedge fund manager’s approach: most companies she supports are fairly volatile and come with highly correlated returns. In addition, Wood’s portfolio is extremely concentrated, posing a significant risk as gains and losses are magnified. As an illustration, Wood’s flagship ARK Innovation ETF, with $6.27 billion under management marked a three-year annualized return of -15.64% and a five-year return of 3.05%. The S&P 500, by contrast, raked in annualized returns of 9.98% over three years and 14.65% over five. According to Morningstar Financial, the ARK Innovation ETF lost 29.9% of its value by the end of the first quarter of 2022. The slide came after the flagship fund saw a 24% drop in 2021, highlighting the risk associated with Wood’s full-on growth strategy.
Unwavering Confidence in Bitcoin
In an interview with Bloomberg Markets, Wood predicted that Bitcoin would surpass the $1 million mark by the end of the decade. She ascribed the cryptocurrency’s increasing value to both growing institutional and its limited supply of only 21 million coins. According to the ARK’s manager, BTC has already crossed $108,000 in 2024 and is expected to rise further in the upcoming years. She also highlighted that, in contrast to more conventional assets like gold, Bitcoin is resistant to inflationary pressures. Moreover, Wood emphasized that institutional adoption—especially via Bitcoin ETFs—is increasing the allure of BTC and promoting a wider understanding of its place within the international financial system.
Additionally, Wood has predicted a surge in startup merger & acquisitions (M&A) under the new Trump administration, which has already taken a number of pro-crypto steps. She cited the expected changes to the Federal Trade Commision (FTC) regulations that may lower regulatory barriers and foster an environment of that is more welcome to private sector transactions. According to Wood:
“Regulatory barriers have been a significant obstacle for M&A activity, but that is likely to change.”
She went on to say that these changes might open up new liquidity opportunities for venture-backed companies. As companies regain the ability to make acquisitions without stringent regulation, Wood added, there may be a spike in market activity. For startups looking towards growth or exit opportunities in an economic environment, this would be crucial.
In any case, Cathie Wood is one of the most interesting hedge fund managers to observe in the industry, and much like her peers, she has made significant moves in the third quarter of 2024. For now, however, we will look at the stocks that she has chosen to part ways with.
Our Methodology
We scanned Cathie Wood’s ARK portfolio for Q3 2024 and selected the technology stocks where she discarded her stake by at least 30% or more. We have arranged the list in ascending order of the percentage of stake discarded.
For these stocks, we also mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A technician measuring a semiconductor material using an advanced 3D metrology system.
Camtek Ltd. (NASDAQ:CAMT)
Percentage of stake sold by ARK Invest in Q3: 34%
ARK Investment Management’s Q3 Stake Value: $1.45 million
Number of Hedge Fund Holders: 27
Camtek Ltd. (NASDAQ:CAMT) develops, manufactures, and sells inspection and metrology equipment for various segments of the semiconductor industry, such as advanced interconnect packaging, memory, image sensors, and radio frequency. Cathie Wood reduced her stake in the company by 34% in the third quarter of 2024.
Northland reaffirmed its Outperform rating on Camtek Ltd. (NASDAQ:CAMT) on January 7, with a price target of $120. The company was named a Top Pick by the firm’s analysts for the calendar year 2025, highlighting its potential in the face of growing changing industry trends. Similarly, Stifel reaffirmed its Buy rating on CAMT shares, with a consistent price target of $105, citing several positive indicators, including improved backlog visibility in China and the strength of certain AI packaging customers.
The company reported record revenue of $112 million for the third quarter of 2024, representing a 40% increase from the same period last year. High-performance computing (HPC) products, fueled by demand for GenAI, accounted for half of this revenue. In addition, Camtek Ltd. (NASDAQ:CAMT) is also looking forward to the launch of a new advanced packaging system SEMICON Korea in early 2025. On the other hand, the company expects some decline in revenue from China and potential customer qualification issues that could potentially impact growth.
Overall CAMT ranks 9th on our list of the stocks to sell now according to Cathie Wood. While we acknowledge the potential of CAMT as an investment, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than CAMT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
Disclosure: None. This article is originally published at Insider Monkey.