Cathie Wooden has bought over 1 million shares of software program inventory GitLab over the previous couple of weeks.
Cathie Wooden is the CEO and chief funding officer of Ark Make investments. During the last a number of years, she has earned a repute for making overly bullish calls on firms that will usually lack the total consideration of the remainder of Wall Road.
One other side of Wooden’s funding prowess that’s fairly unusual is that she has Ark publish its buying and selling exercise each day. With this in thoughts, it is by no means a query of what shares Wooden is shopping for or promoting, however why she could also be doing so.
Towards the tip of final yr, I began noticing some frequent purchases of GitLab (GTLB 2.58%) from Ark’s each day buying and selling studies. In case you’re unaware of GitLab, worry not!
Beneath, I’ll break down Wooden’s buying and selling exercise in GitLab inventory and make the case for why this under-the-radar synthetic intelligence (AI) participant is price preserving in your radar.
Cathie Wooden cannot get sufficient of GitLab
Within the desk under, I’ve outlined Ark’s shopping for exercise in GitLab over the previous a number of weeks:
| Date | Shares Bought |
|---|---|
| Dec. 23 | 78,185 |
| Dec. 24 | 269,976 |
| Dec. 31 | 245,243 |
| Jan. 6 | 290,710 |
| Jan. 7 | 162,121 |
Information supply: Ark Make investments.
Because the finish of December, Wooden has bought barely greater than 1 million shares of GitLab and unfold the place throughout two of Ark’s exchange-traded funds (ETFs): ARK Innovation ETF and ARK Subsequent Era Web ETF.
Picture supply: Getty Pictures.
Why GitLab might be an incredible AI alternative
GitLab is a software program platform that helps builders code, establish safety vulnerabilities, and automate testing multi function platform.
Picture supply: GitLab.
The corporate’s AI platform, GitLab Duo, is built-in with Amazon Q — an agentic AI chatbot. Throughout GitLab’s third-quarter earnings name in early December, administration famous that “the subsequent evolution in AI might be agentic” and “agentic AI is the muse of GitLab Duo workflow.”
I don’t see the collaboration with Amazon as coincidental. Microsoft‘s CoPilot is likely one of the largest agentic AI techniques obtainable proper now, and a giant a part of its success might be traced again to GitHub. Keep in mind, GitHub is maybe probably the most direct competitor to GitLab, and have become part of Microsoft’s ecosystem after it was acquired for greater than $7 billion again in 2018.
Must you comply with Wooden’s lead and purchase GitLab inventory proper now?
In 2024, shares of GitLab declined by roughly 10%. Contemplating AI fueled the S&P 500 and Nasdaq Composite to new highs on quite a few events final yr, it is truly shocking to discover a know-how inventory that underperformed the broader market.
Within the desk under, I’ve illustrated GitLab’s value motion between the dates that coincide with Ark’s purchases. Given the temporary sell-off towards the tip of the yr, it seems that Wooden took benefit of the depressed value motion and purchased the dip.
Contemplating GitLab’s high line is rising at greater than 30% yearly and the corporate has not too long ago transitioned from a cash-burning operation to producing optimistic web revenue, I are likely to assume the underperformance within the inventory boils right down to a few elements equivalent to competitors and excessive expectations from traders.
Whereas it stays a lot smaller than Microsoft’s GitHub, I would not low cost GitLab’s potential. Contemplating the corporate is partnering with Amazon and particularly specializing in agentic AI, I personally assume GitLab is subtly positioned for a lot greater income and revenue development.
I believe GitLab might be an attention-grabbing alternative for traders in search of doubtlessly high-growth, albeit unstable, names within the AI realm.
John Mackey, former CEO of Complete Meals Market, an Amazon subsidiary, is a member of The Motley Idiot’s board of administrators. Adam Spatacco has positions in Amazon and Microsoft. The Motley Idiot has positions in and recommends Amazon, GitLab, and Microsoft. The Motley Idiot recommends the next choices: lengthy January 2026 $395 calls on Microsoft and quick January 2026 $405 calls on Microsoft. The Motley Idiot has a disclosure coverage.
