Cathie Wood Is Selling Tesla and Buying This "Magnificent Seven" Stock Instead

Core Insights - Ark Invest has been selling Tesla stock and reinvesting the proceeds into Amazon, indicating a strategic shift in portfolio management [1][5][8] - Cathie Wood, the CEO of Ark Invest, is known for her unconventional investment strategies, focusing on emerging technologies while also maintaining exposure to established companies [2][3] - Despite selling Tesla shares, Wood remains bullish on the long-term prospects of the company, having set a five-year price target of $2,600 for Tesla stock [11] Tesla Position - Ark Invest has consistently sold Tesla shares over the past few weeks, with significant sales recorded on various dates, totaling 395,500 shares sold between October 24 and November 7 [6][5] - The decision to trim Tesla holdings is seen as a profit-taking move following a more than 30% increase in Tesla's stock price after its third-quarter earnings report [6][7] - Wood's strategy includes rebalancing the portfolio to mitigate risks associated with Tesla's stock volatility [7] Amazon Investment - Ark Invest has purchased over 395,000 shares of Amazon between October 8 and November 7, viewing it as a strong investment opportunity due to its diverse business model [8][10] - Amazon's partnership with Anthropic positions it to leverage AI across its operations, enhancing customer engagement and growth potential [9] - The company's financial health is robust, with $48 billion in trailing-12-month free cash flow and $88 billion in cash and equivalents, allowing for continued investment in AI-driven strategies [10] Long-term Outlook - Wood's long-term bullish stance on Tesla remains intact, with the company still being a core holding in Ark's funds [11] - The current investment in Amazon is viewed as a smart move, especially as its shares are considered historically cheap on a price-to-free-cash-flow basis [12]