ARK Invest rode to fame during the 2020-21 pandemic. The actively managed exchange-traded fund benefited from its strong conviction buy in Tesla (TSLA).
The stay-at-home nature of the pandemic distorted markets. Virtual health care, e-commerce, and cloud software companies soared. When the world ended the lockdown, the re-opening left those sectors in shambles.
Ark’s top holdings include Zoom Video (ZM). Zoom meetings are a reminder of the pandemic. People will shy away from the platform.
Instead, they might use Cisco’s Webex meeting tool or Microsoft Teams, which is free. Corporations do not have extra costs running Teams virtual meetings.
Tesla stock is in a downtrend. The longer CEO Elon Musk runs Twitter, the more chances mainstream media may doubt his leadership in Tesla.
Block (SQ), Shopify (SHOP), and Roku (ROKU) are more examples of post-pandemic stocks that have limited upside. Markets will discount their share price as the recession unfolds this year.
Teladoc Health (TDOC) will struggle. Virtual health care is waning. People want to visit their doctors and health care professionals in person.
In the cryptocurrency market, Coinbase (COIN) has headwinds. Bankruptcies on platforms are shaking user confidence. This will hurt Coinbase’s transaction volumes, pressuring its revenue and profits.
