Major setbacks have hit Cathie Wood’s ARKW, ARKF, ARKF, and ARKQ ETFs as they face significant outflows and underperformance. The flagship ARK Innovation Fund (ARKK) has experienced a substantial loss of assets, dropping from its peak billions of dollars. Similar trends can be observed in the ARK Autonomous Tech & Robotics (ARKQ) and ARK Fintech Innovation (ARKF) ETFs as they continue to underperform the broader S&P 500 and Nasdaq 100 indices.
Adding to the woes, one of the companies held in these ETFs, UiPath (NYSE: PATH), recently reported weak financial results. This led to a sharp decline in its stock price, plunging by over 34% to its lowest level since January 2023. UiPath has experienced a significant drop from its highest point this year and all-time high, with the market cap shrinking from over $44 billion to less than $10 billion.
Despite encouraging financial results, including a 16% revenue increase in the first quarter and a 21% rise in Annual Recurring Revenue (ARR), UiPath signaled slower business growth due to increased deal scrutiny and lengthened sales cycles. The company anticipates second-quarter revenue between $300 million and $305 million, with full-year revenue projected to be between $1.40 billion and $1.41 billion.
In addition to these challenges, UiPath’s stock price suffered further after the departure of its CEO, Rob Enslin. Such CEO transitions often indicate a company’s need for a turnaround strategy. UiPath is a significant part of Cathie Wood’s ETFs, ranking among the top companies in Ark Innovation Fund, ARKQ, ARKF, and ARKW.
UiPath’s importance in Cathie Wood’s portfolio stems from its role in providing enterprise automation and AI solutions to notable companies like Wells Fargo, Orange, Merck, and Siemens. However, the recent setbacks highlight the challenges faced by both Cathie Wood’s ETFs and UiPath as they navigate through turbulent times.
Source: Invezz