Cathie Wood’s Ark Invest added to several high-profile holdings on Monday, a signal that the firm is continuing to press forward with its disruptive growth strategy even as much of 2024 has proven challenging for ARK’s portfolio. Ark’s daily transaction disclosures show the fund increased positions in DraftKings, Shopify and Tempus AI, adding to stakes in names that are navigating slower growth, competitive dynamics and early-stage execution risk.
Key takeaways
- DraftKings was added despite revenue growth slowing to 26% in its latest quarter, while the company moved back into profitability and is developing initiatives such as a gaming tax surcharge reversal.
- Shopify remained among Ark’s largest exposures as Wood added to shares following a second-quarter improvement in revenue, margins and free cash flow.
- Tempus AI saw additional buying after its early public-market performance, following a quarterly report that beat initial expectations.
- Implication: Ark appears willing to add exposure where it sees signs of operational stabilization or improving fundamentals, even if near-term sentiment remains volatile.
What drove Ark Invest’s buys in DraftKings
DraftKings shares have surged dramatically over the past year, but the stock has recently been “marching in place” as the market has questioned whether growth can keep accelerating in a more competitive online sportsbook environment. According to the article, after four consecutive years of revenue increases of 63% or better, the company’s latest-quarter top line rose 26%, reflecting a slowdown.
Operational metrics showed mixed momentum. The company reported 8.4 million unique users over the past 12 months, up 35% year over year. However, while monthly unique payers increased to 3.1 million in the second quarter—up 50% versus the prior year—the revenue gain was tempered by lower average revenue per payer, described as down 15% compared with the year-ago quarter.
On the earnings line, the article said DraftKings surprised investors by returning to profit after back-to-back bottom-line misses. It also noted that analysts expect DraftKings to deliver its first full-year profit in 2025.
Competition in regulated U.S. sports betting remains a key issue. The article pointed to a policy-driven revenue attempt: DraftKings planned to roll out a gaming tax surcharge in four high-tax states where multiple operators operate. After its largest rival indicated it would not match the approach, DraftKings reversed course, which the report said eliminated the potential revenue boost from that move. The buyback announcement in the same period—described as a $1 billion share repurchase earlier this month—adds another layer to the investment case by returning capital while the market evaluates longer-term growth.
Why Shopify stayed at the center of the portfolio
Shopify is described as the pole position among Ark’s holdings, and Wood added more on Monday. The article framed Shopify’s recent trajectory as a recovery story after a weak start to 2024: it had traded as much as 30% lower year to date following disappointing results reported three months earlier. That concern eased after the company posted a stronger second-quarter report earlier this month.
According to the article, Shopify’s second-quarter revenue rose 21% to $2 billion. It also cited an underlying comparison that would reflect a 25% increase after adjusting for the logistics business Shopify has unloaded over the past year. Growth was supported by expansion across segments, with the flagship merchant solutions category up 19%, and subscription solutions up 27%.
Investors were also reacting to profitability improvements. The article said margins widened and free cash flow more than tripled, while Shopify delivered a beat on both the top and bottom lines. With subscription solutions now accounting for more than a quarter of revenue, the report’s characterization is that Shopify is strengthening the mix of recurring revenue—an area that tends to matter when investors assess durability of cash flows. The article added that Shopify’s results rewarded Wood, positioning it as her largest position across Ark funds.
Tempus AI: buying after an initial public-market test
Tempus AI was the only stock the article said Wood purchased in more than one of her Ark funds on Monday. The company recently went public, described as launching at $37 two months earlier. The report linked the stock’s rise this month to an earnings beat and a strategic investment the company made in a promising biotech.
Tempus focuses on applying artificial intelligence to healthcare, and the article said the platform is now connected to nearly two-thirds of the country’s academic medical centers and about half of oncologists. That adoption context is important because it suggests the firm is expanding data access—an input that can influence model performance for diagnostic and clinical workflows.
On the financial side, the report said Tempus delivered its first financial update as a public company two weeks ago. It cited revenue of $166 million, described as ahead of early analyst forecasts, and an adjusted loss that was cut by half relative to what the early Street target expected. The article also noted that Wood took advantage of a 7% slide on Monday to add to her stake, implying near-term volatility created a window to increase exposure.
Bigger picture for Ark’s strategy
Ark’s buys in DraftKings, Shopify and Tempus AI suggest the fund remains focused on companies where it sees a pathway to improved fundamentals—profitability recovery for DraftKings, cash-flow and margin expansion for Shopify, and execution validation for Tempus AI soon after its public listing. For investors, the key question is whether these operational turns can persist as growth comparisons get tougher and competition intensifies in regulated markets like online sports betting.
Next, investors will likely watch upcoming company updates for signs that the latest quarter’s trends hold up. For Ark’s holdings in particular, near-term catalysts include continued progress on revenue and profitability for DraftKings, further margin and cash-flow momentum at Shopify, and additional operating and financial reporting from Tempus AI following its early public-market period. Broader macro factors—such as interest-rate expectations and risk appetite for growth and innovation-led equities—will also influence how quickly capital rotates back into these themes.
