In this article, we discuss 5 stocks that Cathie Wood is buying in September. If you want to see more stocks that Wood purchased this month, check out Cathie Wood is Buying These 10 Stocks in September.
5. Roblox Corporation (NYSE:RBLX)
Number of Hedge Fund Holders: 38
Roblox Corporation (NYSE:RBLX) is headquartered in San Mateo, California, operating as a 3D online entertainment platform. Roblox Corporation (NYSE:RBLX) reported on September 15 that estimated bookings for August were between $233 million and $237 million, up 5% to 7% year-over-year, while estimated revenue was between $208 million and $211 million, up 22% to 24% year-over-year. Daily active users and hours engaged on the Roblox Corporation (NYSE:RBLX) platform also increased. However, estimated average bookings per daily active user, a core revenue metric, showed a 14% to 16% decrease year-over-year in August.
Cathie Wood’s ARK Investment Management on September 16 purchased 107,199 shares of Roblox Corporation (NYSE:RBLX). The stock has been part of the ARK portfolio since the first quarter of 2021.
Among the hedge funds tracked by Insider Monkey, 38 funds were bullish on Roblox Corporation (NYSE:RBLX) at the end of June 2022, compared to 40 funds in the prior earlier quarter. Jim Simons’ Renaissance Technologies is the biggest position holder in the company, with 11.5 million shares worth $380.5 million.
Tao Value, an investment management firm, discussed the performance of Roblox Corporation (NYSE:RBLX) in its Q4 2021 investor letter. Here’s what the fund said:
“Roblox (RBLX) got significant more attention from both institutional & retail investors after Facebook announced to rename itself as Meta Platforms. I believe the price appreciation is largely attributed to the increased attention. On the business side, Roblox rolled out a few successful music events and also partnered with Netflix on testing long-form media consumption in the virtual world. Apple in its iOS 14.5 rolled out an impactful change for the digital advertising landscape by requiring all apps to ask users to “opt in”.
4. Zoom Video Communications, Inc. (NASDAQ:ZM)
Number of Hedge Fund Holders: 44
Zoom Video Communications, Inc. (NASDAQ:ZM) is a California-based communications company that has featured on the ARK portfolio since the last quarter of 2020. On September 13, Cathie Wood acquired an additional 208,535 shares of Zoom Video Communications, Inc. (NASDAQ:ZM), further strengthening its long-standing stake.
On September 12, KeyBanc analyst Thomas Blakey initiated coverage of Zoom Video Communications, Inc. (NASDAQ:ZM) with a Sector Weight rating and no price target. He sees CCaaS (Contact Center as a Service) having structural, strategic, and economic upside as compared to current contact center solutions, and believes Zoom Video Communications, Inc. (NASDAQ:ZM) is well-positioned to gain share in the segment. However, he also cited the untested monetization of other services and a contracting online segment for his Sector Weight rating on the stock.
According to Insider Monkey’s data, Zoom Video Communications, Inc. (NASDAQ:ZM) was part of 44 hedge fund portfolios at the end of Q2 2022, compared to 43 funds in the last quarter. Ken Fisher’s Fisher Asset Management is one of the leading stakeholders of the company, with 4.7 million shares worth close to $509 million.
Here is what Horos Asset Management had to say about Zoom Video Communications, Inc. (NASDAQ:ZM) in its Q1 2022 investor letter:
“What about the other asset class that has attracted the most attention from the investment community in recent times? Here we can distinguish three major groups. First, those companies without earnings that had convinced investors of their great future growth prospects, pushing up their valuations to irrational levels. A clear example of this, which we mentioned almost two years ago (see here) is Zoom Video Communications (“Zoom”), whose market cap exceeded that of companies such as IBM or came close to that of Cisco Systems. Well, from the time we wrote about this odd situation until today, Zoom shares have collapsed nearly 80%.
Therefore, if interest rates rise (or are expected to rise), company valuations are negatively impacted. This is especially true for those businesses that generate little cash today and the market expects them to generate a lot of cash in the future. Hence the severe losses in companies that promised a lot of cash generation in the future (such as Zoom).”
3. Twilio Inc. (NYSE:TWLO)
Number of Hedge Fund Holders: 64
Twilio Inc. (NYSE:TWLO) is a California-based company providing a cloud communications platform. On September 11, the stock traded higher as the company trimmed its workforce by roughly 11% and reaffirmed its guidance for the third quarter of 2022. Cathie Wood’s fund has owned a stake in Twilio Inc. (NYSE:TWLO) since Q4 2016, with minor breaks over the years. She added to her Twilio Inc. (NYSE:TWLO) position in September, buying about 91,500 shares. The latest purchase was made on September 13.
BTIG analyst Matt VanVliet on September 15 reiterated a Buy rating on Twilio Inc. (NYSE:TWLO) and lowered the price target on the stock to $105 from $130. The 11% workforce reduction and its potential impacts on the broader consumer demand environment is a positive catalyst that will support its forward growth plan, the analyst told investors. However, it is also likely to limit top-line growth as Twilio Inc. (NYSE:TWLO) deals with a smaller workforce.
According to Insider Monkey’s data, 64 hedge funds were long Twilio Inc. (NYSE:TWLO) at the end of the second quarter of 2022, compared to 75 funds in the preceding quarter. David Blood and Al Gore’s Generation Investment Management is the one of the largest stakeholders in the company, with 4.4 million shares worth over $370 million.
Here is what Carillon Scout Mid Cap Fund has to say about Twilio Inc. (NYSE:TWLO) in its Q1 2022 investor letter:
“Twilio (NYSE:TWLO), the messaging and marketing automation software platform, sold off along with other highly valued software-as-a-service providers. Although the company management team expects continued strong growth, investors have grown concerned that demand could slow following the surge in digital communication during the pandemic.”
2. Block, Inc. (NYSE:SQ)
Number of Hedge Fund Holders: 72
Block, Inc. (NYSE:SQ) is a California-based payments technology company. Cathie Wood has held a position in Block, Inc. (NYSE:SQ) since the last quarter of 2016. In September, ARK Innovation ETF added a further 222,799 shares of Block, Inc. (NYSE:SQ) to its portfolio. The latest purchase was made on September 16.
Evercore ISI analyst David Togut on September 14 double downgraded Block, Inc. (NYSE:SQ) to Underperform from Outperform, slashing the price target to $55 from $120. The analyst sees “growing headwinds” to the company’s Seller and Buy Now Pay Later businesses, on the back of aggressive competition, tightening credit, and an anticipated slowdown in macroeconomic growth. The analyst lowered 2023 gross profit estimates by 9% to $7 billion, which is 5% below the Street consensus.
According to Insider Monkey’s data, 72 hedge funds were bullish on Block, Inc. (NYSE:SQ) at the end of Q2 2022, compared to 84 funds in the last quarter. Brian Bares’ Bares Capital Management is the largest stakeholder of the company, with 6.6 million shares worth $408 million.
Here is what Baron Fintech Fund has to say about Block, Inc. (NYSE:SQ) in its Q2 2022 investor letter:
“Block, Inc. provides point-of-sale technology to small businesses and operates the Cash App ecosystem of financial services for individuals. Shares fell due to mixed quarterly results with more modest growth in the Seller business offsetting strength in Cash App. While integration of recently acquired Afterpay is progressing well and credit metrics remain healthy, the buy-now-pay-later business slowed due to greater competitive intensity. We continue to own the stock due to Block’s long runway for growth, sustainable competitive advantages, and unique corporate culture.”
1. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 84
Cathie Wood has been bullish on NVIDIA Corporation (NASDAQ:NVDA), the American semiconductor giant, since the last quarter of 2016. ARK Investment Management has held on to its NVIDIA Corporation (NASDAQ:NVDA) stake over the years, strengthening its hold on the stock in Q2 2022 by a whopping 103405%. On September 1, Cathie Wood purchased another 226,717 shares of NVIDIA Corporation (NASDAQ:NVDA).
On September 15, Mizuho analyst Vijay Rakesh maintained a Buy recommendation on NVIDIA Corporation (NASDAQ:NVDA) but lowered the price target on the shares to $205 from $225. The analyst believes some hyperscalers could begin to see a slowdown nearing the end of 2022 given the macro concerns. His checks indicate that hyperscale orders are receiving “pushbacks” but no cancellations, with Q3 trending flat quarter-over-quarter and Q4 “potentially soft”.
According to Insider Monkey’s second quarter database, NVIDIA Corporation (NASDAQ:NVDA) was part of 84 hedge fund portfolios, down from 102 funds in the last quarter. Ken Fisher’s Fisher Asset Management held a prominent position in the company, comprising 7.6 million shares worth $1.15 billion.
Here is what Baron Fifth Avenue Growth Fund has to say about NVIDIA Corporation (NASDAQ:NVDA) in its Q2 2022 investor letter:
“At the company-specific level, there was a broad correction across the entire portfolio. While four of our holdings contributed to performance, the contribution to absolute returns was less than 100bps combined, as unfortunately none of them were large enough to move the needle. We had 16 investments detracting over 100bps each with NVIDIA (NASDAQ:NVDA), our second largest detractor, costing the Fund 254bps.
NVIDIA’s stock was hit even harder, down 44.4%, impacted by concerns over the health of the consumer, dramatic declines in crypto, and COVID-related lockdowns in China. Despite the sell-off and the increased near-term volatility in its gaming business, NVIDIA’s revenues grew 46% year-over-year with 48% operating margins, driven by continued strength in its data center business as companies across industries adopt AI and ML…” (Click here to see the full text)
You can also take a look at 10 High Yield Dividend Stocks For Stable Income and 12 Best New Tech Stocks To Buy.
