Cathie Wood’s ARKK Innovation ETF steady despite drop in Zoom, its top holding
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Cathie Woodâs tech-focused ARKK Innovation ETF (NYSEARCA:ARKK) was down only marginally during Tuesday's intraday trading, despite a sharp earnings-related slide in Zoom Video Communications (NASDAQ:ZM), the fund's biggest holding.
Shares of the online video conferencing platform plunged more than 7% after the company reported unimpressive Q3 revenue and lowered the FY2023 sales outlook.
ZM is owned by 174 different ETFs, but it forms a major part of ARK Innovation ETF (ARKK), with a portfolio weight of 8.31%. This represents the highest weighting of any stock within ARKK, according to data supplied by ETF.com. 
Tesla (TSLA) serves as ARKK's number-two holding, at a 7.6% weighting. Roku (ROKU) represents the third highest weighting at 7.2%. Exact Sciences (EXAS) and Block (SQ) round out ARKK's top five.
Fractional gains in TSLA, ROKU and SQ helped ARKK counteract the downward pressure provided by ZM. Elsewhere in the fund, DraftKings (DKNG) bounced back by 2% following a sharp decline the previous day amid reports of a hack at the sports betting platform.
ZM is also heavily weighted by one of Wood's other funds, the ARK Next Generation Internet ETF (NYSEARCA:ARKW). There, ZM holds a portfolio weight of 7.35%.
Other ETFs with relatively high concentration of ZM include Global X Education ETF (EDUT) and Global X Cloud Computing ETF (CLOU), which are down 0.7% and 0.4%, respectively, during Tuesday's intraday action. ZM does not rank among the top 10 holdings in either fund, although both have a weighting for the stock over 3%.
As part of its quarterly update, ZM lowered its FY2023 revenue outlook to $4.37B to $4.38B vs. prior outlook of $4.385B to $4.395B. This compared to a consensus of $4.38B. Even so, the company raised its non-GAAP diluted EPS outlook to $3.91 to $3.94 vs. prior outlook of $3.66 to $3.69 and consensus of $3.88.
The sales guidance cut led several analysts to cut their price target on the stock:

Baird analyst William Power lowered the price target to $95 from $100 and maintains an Outperform rating on the shares. The analyst said they reported solid overall Q3 results, with slightly lower revenue guidance, including a weak deferred revenue outlook, and ramping stock based compensation expense.
Piper Sandler analyst James Fish lowered the price target on the stock to $77 from $84 and keeps a Neutral rating and says that the lead metrics continue to "decelerate and miss," its total customers are declining and the Q4 guidance came in below consensus.

Over a period of one year, ZM has lost around 70% of its value, ARKK around 68% and ARKW around 71%.
For more on ZM's prospects following the latest earnings data, see why Seeking Alpha contributor Cestrian Capital Research says investors should consider the stock at these levels. Taking a more bearish perspective, fellow SA contributor Bill Maurer calls the latest earnings release "another miserable growth report."