Cathie Wood Just Bought $21 Million in Block (XYZ) Stock. Here’s Why.

TLDR

• Block stock fell 6.15% on Thursday, closing at $79, after Q2 results raised concerns about rising operating expenses.
• Ark Invest bought 267,676 Block stock across ARKK, ARKW, and ARKF, worth $21 million.
• Block’s Q2 revenue hit $6.62 billion, up 9% year-over-year, with adjusted EPS of $1.02, up 65%.
• Mizuho raised concerns that operating expenses will rise from $4.48 billion in H1 to $4.56 billion in H2.
• Ark also sold $16.9 million in Shopify and bought $4.6 million in MercadoLibre on the same day.

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Block stock closed at $79 on Thursday, down 6.15%, after the company’s Q2 earnings report raised questions about costs.

Block, Inc., XYZ

That dip didn’t scare off Cathie Wood. Ark Invest stepped in and bought 267,676 Block stock across three of its ETFs on the same day the stock dropped.

The total purchase came to $21 million. Block sits as the 10th-largest holding in Ark’s ARKW ETF, with a total value of $60 million and a 3.51% weight.

Ark’s rules cap any single holding at 10% of a fund’s portfolio to keep diversification in check.

Q2 numbers for Block were largely solid. Revenue came in at $6.62 billion, up 9% year-over-year and ahead of expectations.

Adjusted EPS hit $1.02, a 65% jump year-over-year. Gross profit grew 25% to $3.17 billion.

The Cost Problem

Despite those headline numbers, analysts at Mizuho flagged a concern: operating expenses are heading higher, even after Block cut 40% of its workforce back in February.

Mizuho estimates adjusted operating expenses will rise from $4.48 billion in the first half of the year to $4.56 billion in H2, based on the company’s own guidance.

That gap between strong revenue growth and still-climbing costs is what sent the stock lower.

Ark’s Other Thursday Moves

Ark’s Thursday trades were busy beyond just Block. The firm sold 117,172 Shopify stock across ARKK, ARKW, and ARKF, totaling $16.9 million. That continues a pattern of Ark trimming its Shopify position this week.

On the buy side, Ark picked up 239,907 MercadoLibre stock through ARKW, worth $4.6 million.

In biotech, Ark added 422,198 Intellia Therapeutics stock across ARKK and ARKG, a $4.6 million investment.

Ark also sold 23,907 Palantir stock across multiple ETFs for $3.79 million, and trimmed 65,036 Roblox stock through ARKK for $2.35 million.

Cloudflare and CrowdStrike were also on the sell list. Ark offloaded $2.79 million in Cloudflare and $2.76 million in CrowdStrike, pulling back from two of its cybersecurity holdings.

Separately, Ark bought 20,318 SpaceX stock worth $2.3 million. SpaceX had dropped 13.6% the day before after investors reacted to its $18.4 billion in capital expenditure for Q2, a sixfold increase year-over-year. SpaceX recovered 6.14% on Thursday, closing at $114.92.

Ark also sold 39,509 Bullish stock through ARKW for $910,287. The crypto exchange fell 3.36% on Thursday to close at $23.04.

Block’s stock drop to $79 on Thursday marked its worst single-day move in recent weeks, landing just as Ark moved to add to its position.