Shopify Inc (NYSE: SHOP) has lost nearly 20% in less than a week – a sell-off that Cathie Wood read as an opportunity to load up on shares of the eCommerce giant.
How many shares did she buy?
Stock is responding to the company’s disappointing guidance for its current financial quarter which reiterated that it’s struggling with a slowdown coming out of the pandemic.
Still, Cathie Wood capitalised on the pullback and bought another 776,835 shares of the Ottawa-headquartered firm on Thursday. In total, she spent close to $35 million on these shares that were split between three of her funds.
On the flip side, the billionaire investor took advantage of a 50% year-to-date rally in Nvidia Corporation and trimmed her exposure to the semiconductor behemoth. The chipmaker is set to report its quarterly results next week.
Shopify stock could be worth $65
On Wednesday, Shopify said revenue growth will be in “high teens percentages” in Q1. In comparison, analysts had called for a 20% increase.
But Wood remains constructive on this name because it’s her play on social commerce that’s grown exponentially faster over the pasts three years than traditional eCommerce. In a recent letter to investors, she said:
Social commerce is taking significant share from traditional eCommerce and off-line retail sales.
Her bullish view is in line with RBC Capital that reiterated its “outperform” rating on Shopify stock despite the weak guidance. The firm even raised its price objective to $65 this week that represents about a 50% upside from here.
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