Ginkgo Bioworks (DNA) – In the Midst of a Pivot
Ginkgo Bioworks (DNA) is known as a synthetic biology company. Per their 10-K, they do not make end products. Instead, they offer biological R&D services on their platform to enable its customers to bring their products to market. Historically, Ginkgo’s primary service offering has been cell engineering R&D services where Ginkgo performs technical activities. In 2024, Ginkgo expanded its service offering to include services that provide customers cell engineering tools for biological R&D, where Ginkgo enables its customers to conduct certain in-house R&D activities themselves.
Cell Engineering represents the core of Ginkgo’s business. Its offerings include:
Reconfigurable Automation Cart (RAC) Systems – Proprietary, modular laboratory hardware solution designed to fully automate complex and highly varied biological workflows
Datapoints – Recent advances in ML, molecular simulation, and other computational techniques hold great promise to improve the company’s ability to program cells. They believe their Autonomous Lab is well-positioned to build the kind of large, well-structured datasets that such computational approaches need to succeed.
AI Models – As Ginkgo drives scalability through their models, they have heavily invested in the use and creation of AI foundational and fine-tuned models, which they believe can provide significant benefits to its customers. Because of their access to large amounts of data, which is critical to efficiently leverage AI, Ginkgo is well-positioned to build superior foundational models and from there, build fine-tuned models designed to cater to its customers needs.
In Webinar on Tuesday, a Biotech Screener spreadsheet was shared that included 16 different stocks, all making up what we call the “AI Discovery Basket.” Coming in at #11 was Ginkgo.
There were complementary cells attached to each ticker. For DNA, those included:
Evidence: Divesting the Biosecurity segment to a private investor group in H1:26, leaving a business entirely refocused on AI / autonomous biology — a cleaner, higher-multiple story the Street has struggled to value as a mixed portfolio. Nebula expanding to 103-105 racks by mid-to-late May. Disclosed a $47M PNNL autonomous-lab contract with nearly 100 RACs planned over the next couple of years — the first commercial deployment tied to the federal Genesis Mission — alongside a noted industry shift of drug-discovery work toward automated execution.
Why Its Mispriced: Post-divestiture Ginkgo becomes a pure AI / autonomous-biology play at a fraction of its former valuation. Management refuses to guide revenue and has reframed the story around bookings, so follow-on national-lab and NIH wins are the leading indicator that the pivot is monetizing — and PNNL is the first hard datapoint.
Catalysts: Biosecurity divestiture terms in H1:26; follow-on national-lab / NIH autonomous-lab awards; Nebula rack count and RAC deployment updates.
It just so happens that in Wednesday’s session, when ARKG and all of its components were ripping higher after the Moderna (MRNA) news, Ginkgo saw an unusual call buyer:
From a high-level, when Ginkgo reported its Q2 earnings on August 5th, they confirmed a new multi-institute collaboration deploying four new autonomous labs across leading academic institutions, including Caltech, MIT, University of Maryland, and Northwestern University. Three of the new nodes (Caltech, UMD and Northwestern) were selected and will be supported by the NSF PCL Test Bed (NSF Directorate for Technology, Innovation and Partnerships (TIP) Test Bed: Toward a Network of Programmable Cloud Laboratories). The fourth node, MIT, received a grant from MLSC (Massachusetts Life Sciences Center) to establish a new cloud lab for learning and education, which should help enable researchers and students to design and execute scientist experiments leveraging remote lab capabilities.
Ginkgo intends to deploy its RACs and Catalyst Software to power autonomous facilities, which are expected to be a clean trial for the company’s abilities to design, deploy and establish automated laboratories for a range of clients.
Meanwhile, on a national level, management called out Genesis Mission, a U.S. national initiative launched via Executive Order on November 24, 2025. Led by the Department of Energy, it unites all 17 national laboratories, industry leaders, and academia to build an integrated AI-for-science ecosystem aimed at accelerating technological leadership, energy innovation, and discovery science.
TD Cowen was out a couple days later where they downgraded the stock. While its never great to see a downgrade, they fully admit that a pivot is taking place for this company but timing is uncertain.
“Ginkgo is in the midst of a key transformation period that requires continued investment in both capital and time to achieve the autonomous and data-forward vision they are aiming for over the next few years. The pivot to a focus on Datapoints and Autonomous Labs has merit but will take time to reap the benefit of ongoing investments and manufacturing expansion. In the meantime, near-term growth of the company’s legacy Solutions segment alone remains incremental. Thus, we are moving to the sidelines until we have better visibility into revenue recognition timelines.”
