Tuesday was a rough day for Shopify (NASDAQ: SHOP), Intellia Therapeutics (NASDAQ: NTLA), and GeneDX Holdings (NASDAQ: WGS) investors. All three growth stocks tumbled between 4% and 49%. As the market was selling off those once high-flying stocks, Cathie Wood was buying.
Wood’s Ark Invest added to all three existing positions on Tuesday. They were the only three stocks Ark Invest bought during the trading day. Let’s take a closer look at what could be drawing the founder and CEO of Ark Invest to buy into Shopify, Intellia Therapuetics, and GeneDX on the way down.
Image source: Getty Images.
One of these stocks plummeted 49% on Tuesday.
Tuesday was a rough day for Shopify (SHOP +0.26%), Intellia Therapeutics (NTLA +3.08%), and GeneDX Holdings (WGS +2.58%) investors. All three growth stocks tumbled between 4% and 49%. As the market was selling off those once high-flying stocks, Cathie Wood was buying.
Wood’s Ark Invest added to all three existing positions on Tuesday. They were the only three stocks Ark Invest bought during the trading day. Let’s take a closer look at what could be drawing the founder and CEO of Ark Invest to buy into Shopify, Intellia Therapuetics, and GeneDX on the way down.
Image source: Getty Images.
1. Shopify
Let’s start with the good news. Shopify stock is nearly a 50-bagger since its IPO. It’s even trading higher over the past year. However, the online marketplace operator is falling again after a poorly received financial update in which soft guidance ruined an otherwise solid performance.
Revenue rose 34% for the first quarter, fueled by a 35% jump in gross merchandise volume for the merchants leaning on Shopify’s e-commerce solutions. Adjusted net income fared even better, surging 44%. Both ends of the income statement exceeded expectations, but a recurring theme this earnings season has been strong quarters tripped up by a cautionary near-term tone.
Shopify
Today’s Change
(0.26%) $0.28
Current Price
$107.91
Now for the bad news. Shopify expects year-over-year revenue growth to decelerate in the current quarter. It’s targeting an increase in the high twenties on a percentage basis. This is pretty much where Wall Street pros were anyway, but it dulls the excitement over the first quarter’s 34% top-line jump.
It also doesn’t help that Shopify isn’t exactly cheap. Even after Tuesday’s 16% slide, the stock is still trading for more than 50 times forward earnings. Thankfully, a high P/E ratio hasn’t stopped Shopify before. It’s still generating gobs of free cash flow, and its guidance for the new quarter should extend its streak of a double-digit free cash flow margin to 12 consecutive quarters.
This high-beta stock will remain volatile. Wood doesn’t have a problem with that. She’s buying as others are selling, and betting against Shopify hasn’t been a winning trade for investors with long-term horizons.
Intellia Therapeutics
Today’s Change
(3.08%) $0.41
Current Price
$13.72
2. Intellia Therapeutics
Unlike the double-digit percentage hits for the other two stocks on Wood’s shopping list on Tuesday, Intellia was limited to a 4% retreat. One of Wood’s most popular gene-editing stocks, the developer of next-gen treatments based on CRISPR therapies is connecting with analysts.
Whitney Ijem at Canaccord boosted his firm’s price target from $48 to $58 last week, encouraged by recent positive data from a phase 3 clinical trial of a promising treatment. He’s not even the Street-high on the shares. One analyst thinks Intellia is headed to $95, a big deal for a stock trading in the low teens.
GeneDx
Today’s Change
(2.58%) $0.89
Current Price
$35.40
3. GeneDX Holdings
One of Tuesday’s biggest losers was GeneDX. Shares of the genomics company specializing in the diagnosis of rare diseases shed nearly half of their value after posting disappointing first-quarter results. A report has to be pretty bad for a stock to plunge 49% in a single trading day, so let’s take a closer look.
Revenue rose 17% to $102.3 million through the first three months of this year. After seeing revenue soar 51% and then 40% in the past two years, analysts were holding out for a nearly 30% increase on the top line for the quarter. GeneDX’s bread-and-butter exome and genome revenue rose a respectable 27%, but shortfalls elsewhere — including its average reimbursement rates — dragged overall results down. It also fell short of expectations on the bottom line.
This wasn’t just a one-time fluke. GeneDX is resetting expectations. It now sees $475 million to $490 million in revenue for all of 2026, down from the $540 million to $555 million it was targeting earlier this year. After coming up short by $10 million on the top line in the first quarter, it’s slashing the midpoint of its full-year outlook by $65 million. This appears to be a situation that will get worse instead of better in the near term.
