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Why Cramer Sees Cathie Wood's Top Tech Picks Heading Further Lower

May 13, 2021 12:18 am
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Why Cramer Sees Cathie Wood's Top Tech Picks Heading Further Lower

CNBC "Mad Money" host Jim Cramer said Tuesday rising inflation is taking a toll on tech stocks, and tech-heavy investors such as Cathie Wood-led Ark Investment Management LLC could see more pain in the near future.

Cramer said investors in technology stocks should either brace up for more pain or cut losses on the next sharp move up as turbo-charged growth stocks are getting hit in the current inflationary environment where bond yields are on the rise as well which in turn makes the future earnings from stocks less attractive.

The former hedge fund manager noted that some of the tech stocks are already down double-digits so far in May and make up the largest positions in three of Wood’s exchange-traded funds such as the Ark Innovation ETF (NYSE:ARKK), the Ark Genomic Revolution ETF (BATS:ARKG) and the Ark Fintech Innovation ETF (NYSE:ARKF).

See Also: Cathie Wood Piles Up Palantir For Third Day In A Row, Adding $39M Worth Of Shares

Ark counts Tesla Inc (NASDAQ:TSLA), Teladoc Health Inc (NYSE:TDOC), Square Inc (NYSE:SQ), Roku Inc (NASDAQ:ROKU), Shopify Inc (NYSE:SHOP), Twilio Inc (NYSE:TWLO)  among others as its top investments in these ETFs.

“What worked in 2020 hasn’t been working in 2021 and that’s not gonna change, so get used to it,” Cramer said, noting that Wood is "fantastic at identifying" stocks with the potential for the long haul but they don't fare well in all seasons.

ARKK shares closed 3.73% lower at $102.16 on Wednesday and are down 18% so far this year. ARKG shares closed 2.52% lower at $74.99 and are down 19.5% year-to-date. ARKF shares closed 3.96% lower at $45.85 and are down 7.76% year-to-date.

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