Cathie Wood’s Ark Invest made a strong move into AI infrastructure and cloud technology last week, with Cloudflare taking the top spot as its biggest purchase.
Ark added a combined $29.9M in Cloudflare across its funds after the company posted strong Q2 results that sent the stock up over 16%. Several Wall Street firms praised the results and the company’s guidance.
Cloudflare offers security and web performance solutions through its content delivery network. Its edge computing platform lets clients run code without managing servers, placing it at the center of cloud infrastructure growth.
Nvidia was the second biggest buy of the week. Ark added $26.9M across five of its funds after the chipmaker confirmed it is working with a group of lenders to raise $500 billion for AI infrastructure development.
Cerebras Systems received about $24.5M, reflecting Ark’s continued focus on AI computing. Rocket Lab came in close behind at around $23M, showing Ark’s interest in the space sector. Broadcom also received a $16.7M addition.
Smaller purchases included Teradyne at $9.7M, along with additions to Cerus, Schrödinger, Intellia Therapeutics, Securitize, and the 3iQ Solana Staking ETF.
On the sell side, Deere was the largest reduction at nearly $60M. Shopify followed at $22.8M, and Palantir Technologies was cut by $11.7M.
Ark also trimmed $11.6M from 10x Genomics and $10.3M from Twist Bioscience, continuing a pullback from genomics holdings.
Smaller cuts were made in Snowflake, Caterpillar, Iridium Communications, and several other positions across software, biotech, and industrial sectors.
Despite the buying interest from Ark, Cloudflare’s valuation raises some flags. GuruFocus estimates the stock’s intrinsic value at around $187.20 per share, compared to its current price of $315.78. That puts it about 68.7% above what the firm considers fair value.
The stock’s Price-to-Sales ratio sits at 44.25x, well above its three-year historical median of 24.58x. Cloudflare is still operating at a loss, with earnings per share of -0.58 and an operating margin of -8.11%.
Cloudflare’s GF Score of 75 out of 100 points to solid growth and momentum, but weaker profitability. Insiders have not bought shares in the past three months, while insider selling totaled $252.6M.
Overall, Ark shifted capital toward AI infrastructure, advanced computing, and space, while trimming exposure to industrial and genomics holdings.
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