Cathie Wood Goes Bargain Hunting: 3 Stocks She Just Bought

Cathie Wood's Ark Invest added to its positions in Roku, Blade Air Mobility, and PagerDuty on Tuesday. Despite a 40% year-to-date decline, Ark continues to invest in Roku, now owning over 9% of outstanding shares, citing user and engagement growth despite profitability concerns and Walmart's potential entry into the streaming space. Ark also increased its stake in Blade Air Mobility, which saw revenue rise 14% in its latest quarter, and PagerDuty, despite slowing growth, following a "buy" rating from Craig-Hallum analyst Chad Bennett.

Analysis

Ark Invest has notably increased its holdings in Roku (ROKU), Blade Air Mobility (BLDE), and PagerDuty (PD), signaling continued conviction in its aggressive growth investment style despite its funds underperforming the broader market for the third time in four years. For Roku, Ark's position now exceeds 9% of total shares outstanding, driven by four consecutive days of buying, even as the stock has fallen 40% year-to-date. This accumulation occurs amidst positive operational metrics for Roku, including a 14% year-over-year increase in active households to 81.6 million and a 23% surge in streaming hours in the latest quarter. However, Roku faces challenges, including nine consecutive quarterly deficits—though offset by three recent quarters of positive free cash flow—and concerns over Walmart's potential entry into the streaming hardware space. Average revenue per user (ARPU) has been sluggish, but shows signs of a potential turnaround with only one sequential decline in the last four quarters. Blade Air Mobility, down 9% year-to-date, saw its revenue climb 14% to $51.5 million in its latest quarter (or 22% excluding a discontinued service); while margins are improving, profitability remains a few years out and growth has decelerated from its 2021-2022 peak. PagerDuty, down 5% this year, has also been a frequent Ark purchase, with shares added daily in June despite its revenue growth slowing significantly from 34% (Q2 2023) to 8% (Q1 2025). This buying aligns with a recent upgrade from Craig-Hallum, which raised PagerDuty to 'buy' with a $30 price target, citing expectations of top-line growth acceleration and consistent double-digit bottom-line beats over the past year. The overall market sentiment towards these specific actions is mixed, reflecting the speculative nature of investing in these currently underperforming, albeit growing, companies.

Key Decisions for Investors

• Investors should closely monitor Roku's upcoming earnings for sustained ARPU improvement and a clearer trajectory towards net profitability, balancing Ark's significant accumulation and strong user engagement growth against persistent losses and competitive pressures.
• Consider Blade Air Mobility as a long-term speculative investment, focusing on its ability to achieve profitability, navigate a competitive niche, and successfully integrate higher-tech, carbon-neutral aircraft, given its current revenue growth and margin improvements.
• For PagerDuty, while the sharp deceleration in revenue growth to 8% is a key concern, Ark's consistent buying and a recent analyst upgrade provide a counterpoint; confirmation of the anticipated top-line re-acceleration in subsequent quarters is critical before increasing exposure.
• Recognize that Ark Invest's strategy of buying into these currently out-of-favor growth stocks (ROKU -40% YTD, BLDE -9% YTD, PD -5% YTD) carries a distinct risk-reward profile; align any similar investments with individual risk tolerance and conduct thorough due diligence on each company's specific turnaround prospects.