Ark Invest Buys Shopify as Stock Falls 16% — Cathie Wood Shopify Stock Purchase
Cathie Wood Shopify Stock Purchase: Ark Invest added to Shopify on Tuesday as the stock fell 16% after a poorly received first-quarter update. The buy came while Shopify was still digesting guidance that pointed to slower revenue growth ahead, even after a strong quarter on the numbers that mattered most.
Shopify's first-quarter revenue rose 34% and adjusted net income surged 44%, but the company said growth in the current quarter should decelerate to the high twenties on a percentage basis. For shareholders, that split screen left the stock trading for more than 50 times forward earnings after Tuesday's slide.
Ark's Tuesday shopping list
Ark Invest was only buying three stocks during the trading day on Tuesday, and Shopify was one of them. The firm also added Intellia Therapeutics, which fell 4% on the day, and GeneDX Holdings, which shed nearly half of its value after disappointing first-quarter results.
That makes Shopify the clearest purchase in the basket because the move came against a larger earnings-driven drop rather than a small pullback. Cathie Wood, Ark Invest's founder and chief executive, has again shown a willingness to add to a volatile name when the market price resets faster than the operating results.
Shopify's 34% revenue rise
34% revenue growth in the first quarter kept Shopify's core business moving at a pace that many public software and internet companies would envy. The problem for the stock was not the quarterly print itself; it was the company's own signal that year-over-year growth would slow in the current quarter.
44% adjusted net income growth added another layer to that tension. Shopify delivered a profitable quarter, but the guidance shift told traders to focus less on the just-reported numbers and more on the slope of the next one.
50 times forward earnings
More than 50 times forward earnings leaves little room for a stumble when expectations are already high. Shopify's valuation stayed rich even after Tuesday's 16% drop, and the company has now extended its streak of a double-digit free cash flow margin to 12 consecutive quarters if its guidance for the new quarter holds.
For investors tracking Ark's moves, the practical takeaway is straightforward: the firm is buying into a name that is still expensive, still volatile, and still capable of delivering growth rates well above the market. GeneDX's 17% revenue increase to $102.3 million and Intellia's 4% decline show how selective Ark's buying was on a day when it favored weakness, but Shopify remained the position with the clearest earnings-and-guidance gap.
