Cathie Wood Offloads Millions of Biotech Shares, Ramps Stake in Veracyte Days Before Earnings Beat

ARK Invest CEO Cathie Wood remains steadfast in her reputation for investing in disruptive sectors such as AI, genome development, space exploration, cryptocurrency, and autonomous robotics. Her investment philosophy centres on backing innovations that are shaping the future, often leading her to make bold trades that many institutional investors tend to avoid.

Wood's approach has garnered widespread attention, especially during the COVID-19 pandemic, when her ETFs surged over 100% at their peak in 2020. Her latest filings with the US Securities and Exchange Commission (SEC) reveal significant shifts in her portfolio, particularly within the biotech and healthcare sectors.

Mass Sell-Off of Biotech Stocks

On 30th October, Ark Invest offloaded substantial positions in several biotech firms involved in gene sequencing and therapy development. The sales include:

• 2 million shares of 10X Genomics (Nasdaq: TXG)
• 395,620 shares of Crispr Therapeutics (Nasdaq: CRSP)
• 1.1 million shares of Intellia Therapeutics (Nasdaq: NTLA)
• 2.2 million shares of Strata Critical Medical (Nasdaq: SRTA)
• 5.3 million shares of Pacific Biosciences of California (Nasdaq: PACB)

Most of these companies focus on gene editing and diagnostics aimed at developing novel treatments for a range of diseases. The heavy divestment underscores a strategic shift or profit-taking amid a volatile biotech market.

Strategic Increase in Veracyte Stake

Despite the broader sell-off, Ark Invest made a notable purchase of over 665,690 shares of Veracyte (Nasdaq: VCYT), investing approximately $22.8 million (£17.5 million) at an average price of $34.33 (£26.35) per share. This move increased Ark's holdings to over 4.4 million shares in the cancer genomic testing and molecular diagnostics leader.

This buying spree occurred just days before Veracyte announced a strong Q3 earnings report, beating analyst expectations. The company's adjusted earnings per share (EPS) for Q3 came in at $0.51 (£0.39), up from $0.33 (£0.25) the previous year, surpassing the consensus estimate of $0.32 (£0.24). Revenue for the quarter reached $131.8 million (£101.1 million), up from $151.8 million (£116.5 million) a year earlier, and exceeding the anticipated $124.7 million (£95.7 million). Shares surged 16% during Wednesday's premarket trading.

Veracyte CEO Marc Stapley highlighted the company's momentum: 'We delivered another outstanding quarter of testing revenue growth and adjusted EBITDA margin expansion, enabling us to raise both our revenue and profitability guidance.' He added that the firm remains committed to transforming cancer care through high-quality evidence and clinical insights, underpinning long-term growth prospects.

Ark Invest Offloads More Stocks, Including Roku

Ark Invest also sold over 1.1 million shares of Roku (Nasdaq: ROKU), a move consistent with its quarterly trimming since Q2 2024. The firm currently holds more than 7.3 million shares of the streaming platform.

The sale comes amid ongoing legal challenges faced by Roku, including lawsuits concerning the unauthorised collection and sale of children's personal data, along with patent infringement claims. These legal headwinds may have prompted Ark's decision to reduce its exposure.

Additionally, Ark divested 694,510 shares of 908 Devices (Nasdaq: MASS), a maker of handheld mass spectrometry devices used in health, safety, and defence applications. The firm's stock has soared over 250% year-to-date, yet Ark remains cautious, reducing its stake despite the impressive growth.

Market Context and Outlook

Cathie Wood's recent trades reflect her contrarian approach—selling off high-profile biotech and tech stocks while increasing exposure to promising diagnostics like Veracyte. The move indicates a strategic pivot towards sectors with near-term earnings visibility and long-term growth potential.

With global AI spending forecasted to reach over $3 trillion, and technological innovation accelerating across sectors, investors will closely watch how Wood's bold moves shape her portfolio's performance. Her willingness to offload large positions in volatile sectors while doubling down on promising diagnostics underscores her confidence in certain sectors' resilience and growth trajectory.

As the market continues to evolve, Wood's aggressive repositioning exemplifies the high-risk, high-reward nature of disruptive investing. Whether these moves will translate into sustained success remains to be seen, but her actions signal a keen eye on the evolving landscape of innovation and diagnostics.

Disclaimer: Our digital media content is for informational purposes only and not investment advice. Please conduct your own analysis or seek professional advice before investing. Remember, investments are subject to market risks and past performance doesn't indicate future returns.