Cathie Wooden Is Doubling Down on Recursion Prescribed drugs Inventory. Ought to You Purchase RXRX Right here?

Cathie Wooden’s trades typically learn like a quiet manifesto – what she buys indicators confidence, what she trims hints at fading religion. Within the week ended Dec. 19, that message was clear. ARK Funding Administration leaned tougher into AI-led biotechnology and crypto, whereas paring again publicity to shopper tech and electric-vehicle heavyweights.

On the heart of that shift sat Recursion Prescribed drugs (RXRX). ARK snapped up greater than 2.8 million RXRX shares, value about $13.4 million, unfold throughout ARK Genomic Revolution ETF (ARKG) and flagship ARK Innovation ETF (ARKK). The additions lifted Recursion to the No. 27 holding in ARKK and a top-10 place in ARKG. The Utah-based biotech is betting on synthetic intelligence (AI) to radically shorten drug discovery timelines, a thesis that neatly mirrors Wooden’s long-held view of innovation reshaping healthcare.

The timing is intriguing. RXRX inventory has remained deep within the purple over the previous 12 months, but sentiment has begun to thaw after encouraging medical trial information from certainly one of its pipeline candidates earlier this month. With confidence rising and Cathie Wooden doubling down, ought to traders contemplate shopping for RXRX whereas it’s nonetheless buying and selling greater than half under its YTD peak?

Based mostly in Salt Lake Metropolis, Recursion Prescribed drugs is a clinical-stage biotechnology firm that applies a novel mixture of organic evaluation, chemical experience, superior automation, information science acumen, and engineering improvements to industrialize the drug discovery course of. With a market cap of $2.3 billion, Recursion is on the forefront of harnessing cutting-edge know-how and big datasets to spearhead developments in drugs.

RXRX’s inventory efficiency over the previous 12 months is sort of a lengthy, grinding comedown fairly than a sudden collapse. Over the previous 52 weeks, the inventory slipped 37.6%, sliding one other 9.7% within the final six months, and sitting practically 65% under its February peak of $12.36. Momentum has clearly cooled.

The 14-day RSI has drifted decrease and now hovers close to 46. The downward slope signifies a fading shopping for stress fairly than outright capitulation. Quantity tells the same story – sporadic spikes trace at dealer curiosity. However there is no such thing as a sustained accumulation but, suggesting confidence stays tentative.

The MACD oscillator reinforces that warning. The yellow MACD line is monitoring intently with the blue sign line, with the hole narrowing, signaling slowing draw back momentum. The histogram stays unfavorable, reflecting lingering bearish stress. Collectively, these level to market indecision, the place the promoting pressure may be easing, however a bullish reversal has but to claim itself.

In technical phrases, RXRX appears much less like a inventory able to dash and extra like one catching its breath, trying to find a catalyst robust sufficient to shift sentiment from survival to resurgence.

RXRX at present trades at round 37.17 instances ahead gross sales, a premium to the broader biotech sector, but nonetheless under its personal historic norm, reflecting tempered optimism fairly than outright exuberance.

Recursion Prescribed drugs’ third-quarter outcomes, launched on Nov. 5, generated income of $5.2 million, down sharply from $26.1 million a 12 months earlier and lacking Wall Road’s projections. The prior-year quarter benefited from a one-time $30 million milestone cost tied to the primary phenomap delivered underneath its Roche and Genentech collaboration. A second $30 million milestone was achieved in October 2025, with a portion anticipated to be acknowledged within the fourth quarter.

Bills, nevertheless, advised a extra forward-looking story. Analysis and improvement spending climbed to $121.1 million from $74.6 million, pushed by the acquisition of full rights to REC-102, Recursion’s ENPP1 inhibitor, and the expanded scale following its November 2024 enterprise mixture with Exscientia. Common and administrative bills rose to $41.6 million, reflecting the identical integration dynamics.

Web loss widened to $162.3 million from $95.8 million, although the per-share lack of $0.36 nonetheless got here in under analyst forecasts. Working money outflows for the 9 months ended Sept. 30, 2025, reached $325.7 million, up from $243.7 million a 12 months earlier, partly because of Exscientia’s inclusion and $7.7 million in restructuring-related severance prices introduced in June 2025.

Liquidity stays a stabilizing pressure. Money and equivalents stood at $667.1 million as of Sept. 30, 2025, and $785 million as of Oct. 9, 2025, after $387.5 million in internet ATM proceeds. With funding secured, Recursion tasks its money runway via the top of 2027.

Analysts monitoring Recursion Prescribed drugs anticipate income to be round $61.6 million for fiscal 2025, with losses anticipated to slim 5.3% 12 months over 12 months to -$1.60 per share. For the following fiscal 12 months, loss per share is projected to shrink by 32.5% yearly to -$1.08.

Wall Road simply gave Recursion Prescribed drugs a recent vote of confidence. On Dec. 17, RXRX inventory jumped 11.4%, standing out on an in any other case weak buying and selling day, after J.P. Morgan’s Priyanka Grover upgraded the inventory. She lifted her ranking to “Chubby” from a “Impartial” and nudged her value goal to $11.

The shift hinges on robust medical information from REC-4881, an experimental remedy for familial adenomatous polyposis. The Section 1b/2 readout confirmed significant efficacy, prompting Grover to see actual business promise. In her view, the drug carries blockbuster potential, with a practical shot at topping $1 billion in annual gross sales. She assigns a 60% chance of profitable commercialization, a notably assured stance for a clinical-stage biotech.

RXRX has a consensus “Average Purchase” ranking total. Out of the 9 analysts protecting the inventory, two suggest a “Robust Purchase,” one suggests a “Average Purchase,” and 6 charge it a “Maintain.”

The common analyst value goal for RXRX is $7, indicating a possible upside of 60.6%. Nonetheless, the excessive value goal of $11 means that the inventory may rally as a lot as 152% from present ranges.

Cathie Wooden’s recent shopping for brings renewed consideration to RXRX, however the inventory nonetheless sits at a crossroads. The AI-led drug discovery imaginative and prescient, bettering medical momentum, a stable money cushion, and rising analyst help all strengthen the long-term narrative.

Nonetheless, mushy technical indicators, a premium valuation, and ongoing losses argue for restraint. RXRX doesn’t look like a sprint-ready commerce simply but. As a substitute, it reads as a affected person, high-risk wager – one which will reward traders who can sit via uncertainty whereas ready for know-how, trials, and sentiment to align lastly.

On the date of publication, Sristi Suman Jayaswal didn’t have (both immediately or not directly) positions in any of the securities talked about on this article. All data and information on this article is solely for informational functions. This text was initially printed on Barchart.com