Cathie Wood, at the helm of Ark Investment Management, has been known for her dynamic approach to portfolio management, often buying low and selling high. Her strategy was evident recently with both Palantir Technologies (PLTR) and Kratos Defense & Security Solutions (KTOS).
In the case of Palantir, Wood’s ARK Innovation ETF (ARKK) sold 140,518 shares on Jan. 13, amounting to roughly $9.1 million. This sale follows a pattern of divestment, with Wood having previously sold 221,950 shares worth nearly $17 million between Jan. 3 and Jan. 7. Despite these sales, Palantir remains a significant holding in ARKK, representing about 5.7% of the fund with a market value of around $310 million as of Jan. 20. The decision to sell comes after a stellar 2024 where Palantir’s stock gained over 300%, fueled by its growing significance in the AI and data analytics sectors. This divestment could be seen as a move to realize gains from Palantir’s massive rally, though concerns about its high valuation – currently forward P/E stands at 149.25 – might have also influenced Wood’s decision. However, not all views align with this cautious approach. Wedbush’s Dan Ives remains bullish on Palantir’s prospects, particularly its role in the anticipated AI boom of 2025. Ives has highlighted Palantir’s potential to emerge as the next Oracle (ORCL) over the next decade, fueled by the ongoing AI revolution. He likened the company’s trajectory to a transition from adolescence to maturity, arguing that as Palantir executes its strategic plans, its stock could warrant even higher valuations. Ives sees Palantir as a ‘table pounder’ — a must-have investment for forward-looking investors.
On the other hand, Wood’s approach to Kratos Defense & Security Solutions (KTOS) shows a similar tactical adjustment. On Jan. 15, her ARK Space Exploration & Innovation ETF (ARKX) sold 78,481 shares of Kratos, valued at $2.7 million. Kratos has been on an upward trajectory since the beginning of 2025, with its stock rising 27.45% due to significant contracts like a five-year Pentagon deal potentially worth $1.45 billion. This company plays a critical role in developing AI-integrated technologies for defense and government applications, such as autonomous drone systems and satellite communications. It is ARKX’s second-largest holding, accounting for approximately 8.55% of the fund, trailing only Rocket Lab USA, Inc. (RKLB). Despite a recent pullback, analyst Stephen “Sarge” Guilfoyle of TheStreet remains bullish, setting a price target of $35 based on Kratos’s recent contract wins and strong financial performance.
Both Palantir and Kratos, trading at $72.24 and $33.75 respectively, illustrate how Wood navigates the volatile tech and defense sectors, balancing between capitalizing on growth and managing risks associated with high valuations. While Palantir has seen a 5% decline since the start of 2025, Kratos is still on an upward trend, highlighting the diverse outcomes of Wood’s investment strategies in these companies. Her actions reflect a broader philosophy of proactive portfolio management, adapting to market signals, and leveraging insights into technology trends, especially in AI and defense tech, which are seen as pivotal in the coming years.
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