Ace hedge fund manager Cathie Wood’s flagship fund, ARKK Innovation ETF, managed to hold up on November 22, despite record lows in two of its major holdings – Zoom Video Communications (NASDAQ:ZM) and Tesla (NASDAQ:TSLA).
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Surprisingly, the ARKK ETF remained in positive territory yesterday, even after ZM stock plunged over 10% and TSLA stock marked a new 52-week low of $166.19 in intraday trading. Unfortunately, the ARKK ETF has lost nearly 66% in the past year as technology companies have been weighed down by macroeconomic headwinds.
The other three companies forming the top five holdings of the technology-focused fund are video streaming giant Roku (NASDAQ:ROKU) at 7.25%, molecular diagnostics company Exact Sciences (NASDAQ:EXAS) at 6.82%, and fintech company Block (NYSE:SQ) at 5.41%. Let’s take a look at why the top two holdings of ARKK declined yesterday.
Zoom Video Communications (NASDAQ:ZM)
ZM posted weak third-quarter results on November 22, with earnings beating expectations and revenue falling in line with the consensus. Nonetheless, the stock plunged as the company lowered the forecast for Fiscal 2023.
Interestingly, ZM takes the #1 spot in the ARKK ETF with 9.52% of total holdings. The current holding value of ZM shares is roughly $691.06 million.
What is the Price Target for ZM Stock?
On TipRanks, the average Zoom Video Communications price target is $88.53, which implies 14.8% upside potential to current levels. Also, analysts have a Hold consensus rating on ZM stock based on six Buys, 15 Holds, and two Sell ratings. Meanwhile, the stock has lost 58.1% so far this year.
Tesla (NASDAQ:TSLA)
Tesla marked a new 52-week low yesterday as renewed fears of rising COVID-19 cases and related lockdowns weighed on the stock.
Moreover, the growing number of vehicle recalls and the assumed distraction of CEO Elon Musk’s newly acquired company, Twitter, seem to be pulling down investor sentiment.
Remarkably, Cathie has always been a longtime Musk supporter and Tesla bull. TSLA stock is the second-highest holding of the ARKK ETF, with 7.46% of total holdings, valued at $541.08 million.
What is the Future of Tesla Stock?
Analysts remain split on Tesla’s stock trajectory. On TipRanks, Tesla has a Moderate Buy consensus rating based on 19 Buys, seven Holds, and three Sell ratings. The average Tesla price forecast of $308.94 implies an impressive 81.8% upside potential to current levels. At the same time, TSLA stock has lost 57.5% year to date.
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