Cathie Wood’s ARK Invest is taking some money off the table in Shopify Inc. (NASDAQ:SHOP) after the stock’s blockbuster August rally, putting the spotlight on whether the growth-focused firm is becoming more selective as valuations stretch.
ARK sold 40,392 Shopify shares on Sep. 2, with the ARK Innovation ETF (BATS:ARKK) accounting for 35,322 shares and the ARK Next Generation Internet ETF (BATS:ARKW) selling another 5,070 shares. The transactions followed a more than 25% August surge that pushed SHOP past $158.
Shopify has pulled back about 7% in the past week, while its trailing price-to-earnings ratio is approaching 96 times. Yet the underlying business continues to deliver strong growth. Second-quarter revenue jumped 34% year over year to $3.58 billion, GMV rose 32% to $115.57 billion and free cash flow reached $654 million, giving Shopify an 18% free-cash-flow margin.
The ARK trades, therefore, raise a bigger ETF question. Is Wood trimming Shopify because its valuation has run ahead of even its impressive growth, or simply reallocating capital after a strong gain?
Shopify remains in a meaningful position across ARK’s lineup. Recent holdings data showed SHOP at roughly 3.4% of ARKK and 4.1% of ARKW, while it was an even larger 7.5% position in the ARK Fintech Innovation ETF (BATS:ARKF).
The portfolio moves suggest the latter may be part of the story. ARK has continued deploying capital into higher-risk growth themes, rather than broadly abandoning aggressive investments.
ARK’s Latest Bets
Gene editing and biotech: ARK added 96,201 shares of Intellia Therapeutics Inc (NASDAQ:NTLA) on Sep. 2, making it the fund manager’s largest buy that day. This fits Wood’s long-standing thesis around CRISPR, gene editing and next-generation healthcare.
Crypto and Solana: ARK also increased its exposure to the 3iQ Solana Staking ETF, signaling continued conviction in blockchain infrastructure and digital assets beyond Bitcoin. This is consistent with ARK’s broader bullish stance on crypto-related investments.
Fintech: In recent trades, ARK has added Block Inc (NYSE:XYZ), suggesting Wood still sees upside in digital payments and financial technology even as she trims Shopify.
Commercial space: ARK has also been adding Rocket Lab (NASDAQ:RKLB), reflecting its long-term thesis around the space economy, satellite infrastructure and launch services.
For investors seeking Shopify exposure through ETFs, the pullback also matters beyond ARK. If the loss of momentum that SHOP displayed this past week continues, investors in the VanEck Digital Native Economy ETF (NASDAQ:GENZ) might need to keep a close watch. The fund has Shopify as its largest holding at 10.1%, making the fund particularly sensitive to SHOP weakness.
Photo: Ark Invest
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