Here is ace investor Cathie Wood’s next big bet - A flying taxi company!

Last updated:
Cathie Wood Bets Big on Archer Aviation

Cathie Wood, the renowned investor and CEO of ARK Invest, is making a big bet on the future of urban air mobility. On 15th August, ARK Invest announced that it had purchased 2.7 million shares of Archer Aviation, a California-based company that is developing electric vertical takeoff and landing (eVTOL) aircraft. The total value of the purchase was about $16 million. 

During the past week, Wood obtained almost 3.7 million shares of Archer. This is about 1.45% of all the Archer shares available. Specifically, Wood bought 2.69 million shares on Wednesday, 646,849 shares on Tuesday, and 340,891 shares last Friday. The share price soared 6.76% after the news. 

Cathie Wood Bets Big on Archer Aviation: Cathie Wood’s Top 5 Holdings

HoldingsPercentage of Assets
Tesla Inc10.14%
Roku Inc Class A9.42%
Coinbase Global Inc Ordinary Shares - Class A8.06%
Zoom Video Communications Inc6.68%
Block Inc Class A6.28%

In addition to buying shares of Archer Aviation, ARK Invest also sold shares of Tesla on the same day. ARK Invest sold 8,972 shares of Tesla, which is valued at about $2.15 million.  

Cathie Wood Bets Big on Archer Aviation: Why Tesla was sold?

The sale of Tesla shares is likely due to Wood's belief that the stock is overvalued. Tesla's stock price has more than doubled in the past year, and it is now trading at a market capitalization of $675.23 billion. Wood believes that Tesla's valuation is unsustainable, and she is taking profits from her investment.  

Cathie Wood Bets Big on Archer Aviation: What is the potential of Archer Aviation?

Archer Aviation is one of the leading companies in the eVTOL space. The company has developed a prototype eVTOL aircraft called the Maker, which is designed to carry four passengers and a pilot. Archer plans to start commercial flights in 2024. Wood is not the only investor who is bullish on the eVTOL market. Other major investors in Archer Aviation include Boeing, Stellantis, and United Airlines. These companies see eVTOLs as a way to revolutionize urban transportation.  

Financial SegmentQ2 FY 2023 (in million)Q2 FY 2022 (in million)YoY%
Net Loss184.471.4158.26%
Operating Expense181.477.4134.37%
Adjusted EBITDA (non-GAAP)-76.3-49.255.08%

Archer Aviation's reported a net loss of USD 184.1 million in Q2 2023 from USD 71.7 million in the previous quarter. The total operating expenses rose to $181.4 million from $77.4 million driven by Research and Development expenses. 

Wood is betting on the potential of Archer Aviation to become a major player in the urban air mobility market. However, there are risks associated as the company is still in the early stages of development, and there is no guarantee that its eVTOL aircraft will be successful.