In this article, we discuss 10 Cathie Wood stocks to buy before the bull run starts. If you want to see more stocks preferred by Cathie Wood to load up on before the bull run begins, click 5 Cathie Wood Stocks to Buy Before the Bull Run Starts.
Cathie Wood, the founder and CIO of ARK Investment Management, is known as an aggressive tech bull. She makes disruptive technology and innovation her main portfolio components. On August 6, Cathie Wood discussed her views on the latest fiscal and monetary policy, addressing her audience via the ARK Invest YouTube channel. She believes that the US Inflation Reduction Act will not work to tame inflation, rather it will weaken growth and hinder productivity, citing higher taxes for corporations and Medicare and drug pricing initiatives which will cause a slowdown in healthcare and pharma.
On August 1, Cathie Wood categorically disagreed with the Fed Chairman Jerome Powell, who believes the United States is not seeing signs of a recession. Wood believes that the country is facing an inventory-led recession, with advertisers pulling back their spending “dramatically”. For example, Snap Inc. (NYSE:SNAP) and Meta Platforms, Inc. (NASDAQ:META) reported lower ad spending on their platforms lately, and Walmart Inc. (NYSE:WMT) and Target Corporation (NYSE:TGT) also said that profits will be hit due to surplus inventory.
ARK Invest bottomed a month before the Nasdaq 100 and S&P 500 posted their lows so far this year, which leads Cathie Wood to believe that her fund will rebound. Some of the Cathie Wood stocks to buy before the bull run starts include Autodesk, Inc. (NASDAQ:ADSK), UiPath Inc. (NYSE:PATH), and monday.com Ltd. (NASDAQ:MNDY).
Cathie Wood of ARK Investment Management
Our Methodology
We used the Q2 2022 portfolio of Cathie Wood’s ARK Investment Management for this analysis, selecting the innovative stocks that Wood is bullish on. These stocks have suffered significant share price losses year to date, and hedge funds are also backing out of most of these securities in Q2. However, Cathie Wood strengthened her position in these companies as she sees long-term potential in them.
While these stocks are down in 2022, they can gain a lot of value when the bull run begins and when investors start to move towards risky tech stocks that are working on long-term projects.
10. TuSimple Holdings Inc. (NASDAQ:TSP)
Number of Hedge Fund Holders: 12
TuSimple Holdings Inc. (NASDAQ:TSP) is a California-based autonomous technology company that manufactures a portfolio of purpose-built L4 autonomous semi-trucks for the North American market. Cathie Wood has always been bullish on innovative tech stocks like TuSimple Holdings Inc. (NASDAQ:TSP), and she upped her stake by 5% in Q2 2022, holding 13.5 million shares worth $113.3 million, representing 0.65% of the total 13F securities. The stock has lost more than 76% in value year to date, however, Wood remains positive on TuSimple Holdings Inc. (NASDAQ:TSP). The stock traded higher on August 1 after the company announced it had secured a $15 million equity investment from Rubric Capital, a New York-based hedge fund.
Baird analyst Ben Kallo on August 3 maintained an Outperform rating on TuSimple Holdings Inc. (NASDAQ:TSP) and lowered the price target on the stock to $11 from $17. The analyst observed that TuSimple Holdings Inc. (NASDAQ:TSP) made modest changes to full-year guidance and reaffirmed the revenue outlook while reducing forecast for adjusted EBITDA loss and stock-based comp expense. He said the stock will potentially be pressured, but he maintained his rating due to technology, optionality of the China business, and its cash balance.
According to Insider Monkey’s data, 12 hedge funds were long TuSimple Holdings Inc. (NASDAQ:TSP) at the end of Q2 2022, down from 17 funds in the earlier quarter. David Ma’s Composite Capital is a prominent shareholder of the company, with 9.2 million shares worth $66.7 million.
In addition to Autodesk, Inc. (NASDAQ:ADSK), UiPath Inc. (NYSE:PATH), and monday.com Ltd. (NASDAQ:MNDY), Cathie Wood boosted her stake in TuSimple Holdings Inc. (NASDAQ:TSP) during the June quarter.
9. Twist Bioscience Corporation (NASDAQ:TWST)
Number of Hedge Fund Holders: 14
Twist Bioscience Corporation (NASDAQ:TWST) is a California-based synthetic biology company that manufactures and sells synthetic DNA-based products. Twist Bioscience Corporation (NASDAQ:TWST) stock has plummeted about 41% year to date as of August 17. However, Cathie Wood in Q2 2022 strengthened her hold on the stock by 20%, and revealed holding 6.2 million shares worth $213.3 million, representing 1.26% of the total 13F securities.
On August 5, Twist Bioscience Corporation (NASDAQ:TWST) posted a revenue of $56.11 million, up 60.2% year over year, outperforming Wall Street estimates by $4.05 million. The company expects the FY 2022 revenue to be approximately $203 million, up from the prior guidance of $191 million-$199 million and a consensus of $196.39 million. Twist Bioscience Corporation (NASDAQ:TWST) forecasts gross margin to be 40%, capital expenditures to be in the range of $95 million-$100 million, and net loss to be about $250 million.
On August 8, Baird analyst Catherine Ramsey Schulte raised the price target on Twist Bioscience Corporation (NASDAQ:TWST) to $56 from $43 and kept an Outperform rating on the shares. The analyst noted that order momentum was encouraging, and management lifted 2022 guidance due to strong fundamentals. The analyst also observed that while the macro backdrop continues to evolve, its large customer base and core pricing advantages give him confidence in the future outlook.
According to Insider Monkey’s Q2 data, 14 hedge funds were bullish on Twist Bioscience Corporation (NASDAQ:TWST), with collective stakes worth $379 million. In Q1 2022, Paul Marshall and Ian Wace’s Marshall Wace LLP held a prominent position in the company, comprising about 2 million shares worth $72 million.
Here is what Baron Funds has to say about Twist Bioscience Corporation (NASDAQ:TWST) in its Q2 2021 investor letter:
“We initiated a position in Twist Bioscience Corporation, a provider of synthetic DNA. The company’s proprietary semiconductor-based platform has driven its position as the low-cost provider of DNA for a variety of high-growth applications. These include the attractive areas of synthetic biology, liquid biopsy, and antibody discovery. Of note, the antibody business has the potential to become a source of high-margin royalty streams in the future.
As further optionality, we believe Twist has a shot at disrupting the entire digital data storage industry with DNA-based storage.”
8. Accolade, Inc. (NASDAQ:ACCD)
Number of Hedge Fund Holders: 15
Accolade, Inc. (NASDAQ:ACCD) is a Pennsylvania-based company that develops technology-led solutions so people can navigate and utilize the healthcare system and their workplace benefits in the United States. The company posted a Q2 revenue of $85.5 million, up 43.7% year over year, topping market consensus by $3.53 million. The stock has plummeted about 57% year to date. However, Cathie Wood sees potential in the company as she lifted her stake in Accolade, Inc. (NASDAQ:ACCD) by 29% in Q2 2022, holding 6.25 million shares worth $40 million.
On August 11, DA Davidson analyst Robert Simmons initiated coverage of Accolade, Inc. (NASDAQ:ACCD) with a Buy rating and a $16 price target. The analyst is optimistic about the company building trusted relationships with customers to achieve better outcomes in medical situations. The analyst added that Accolade, Inc. (NASDAQ:ACCD) should be able to deliver its margin targets over the next few years, reaching breakeven by FY25, and ultimately seeing strong long-term profitability.
According to Insider Monkey’s data, 15 hedge funds were long Accolade, Inc. (NASDAQ:ACCD) at the end of Q2 2022, compared to 22 funds in the earlier quarter. Rock Springs Capital Management is a notable shareholder of the company, with 2.20 million shares worth $16.2 million.
Here is what Baron Discovery Fund has to say about Accolade, Inc. (NASDAQ:ACCD) in its Q4 2021 investor letter:
“Accolade, Inc. is a leader in providing purpose-built, technology-enabled virtual health care and personalized engagement services. Its products are designed to help employees access care and navigate/maximize their benefits with the goals of reduced health care costs and better outcomes. Shares dropped in the fourth quarter, alongside those of other high-multiple, tech-enabled, not yet profitable healthcare companies as investors became more focused on the path to profitability versus pure revenue growth and revisited valuations given the outlook for higher interest rates. Investors also grew more sensitive to perceived competition, as the healthcare IT space continues to attract significant venture capital. We continue to have a positive long-term view on this high-quality, well-managed company. We believe that Accolade has a truly differentiated offering, which is well aligned with the industry’s movement towards value-based care, and which delivers a measurable return on investment to clients. The 2021 acquisitions of 2ndMD and Plushcare, second opinion and virtual primary care providers, respectively, significantly broadened Accolades’ value proposition and should allow for meaningful cross-selling and higher-margin opportunities in 2022 and beyond. We added to our position in Accolade as we believe that shares have been oversold due to macroeconomic reasons rather than fundamental value reasons.”
7. Xometry, Inc. (NASDAQ:XMTR)
Number of Hedge Fund Holders: 16
Xometry, Inc. (NASDAQ:XMTR) is a Maryland-based company that operates a marketplace which allows buyers to access manufactured parts and assemblies in the United States and internationally. On August 10, Xometry, Inc. (NASDAQ:XMTR) rallied 23% as Q2 revenue increased 89% year over year, supported by higher marketplace growth and supplier services. The company reported robust gross margin and gross profit trends driven by AI pricing, supplier selection, and additional supplier services. Cathie Wood boosted her stake in the company by 9% in Q2 2022, holding 187,952 shares worth $6.4 million. The stock has declined about 7.3% year to date as of August 17, but the gains it has recently racked up make it a top stock to purchase before the bull market starts and the price shoots up.
On August 11, CL King analyst David Silver raised the price target on Xometry, Inc. (NASDAQ:XMTR) to $65 from $55 and reaffirmed a Buy rating on the shares after the company posted Q2 results that beat market estimates and raised its guidance for FY22 revenue. He sees Xometry, Inc. (NASDAQ:XMTR)’s value proposition as “compelling” and called the stock “a speculative investment choice appropriate for those willing to accept high share price volatility in pursuit of well-above-market returns”.
According to Insider Monkey’s data, 16 hedge funds were bullish on Xometry, Inc. (NASDAQ:XMTR) at the end of Q2 2022, compared to 19 funds in the prior quarter. Jose Fernandez’s Stepstone Group is the biggest stakeholder of the company, with 2.14 million shares worth about $73 million.
6. 10x Genomics, Inc. (NASDAQ:TXG)
Number of Hedge Fund Holders: 17
10x Genomics, Inc. (NASDAQ:TXG) was incorporated in 2012 and is headquartered in Pleasanton, California. It is a life science technology company that develops instruments, consumables, and software for analyzing biological systems in North America, Europe, the Middle East, Africa, China, and the Asia Pacific. While the stock has lost about 71% in value year to date as of August 17, Cathie Wood upped her stake by 7% in Q2 2022, holding 3.60 million shares worth $184.45 million, representing 1.09% of the total 13F portfolio. She has held the position since Q2 2020.
On August 10, Morgan Stanley analyst Tejas Savant maintained an Overweight rating on 10x Genomics, Inc. (NASDAQ:TXG) but lowered the price target on the stock to $70 from $100 after the company posted Q2 results in line with its pre-announcement and slashed guidance, which was “unsurprising” after the initial release. The prominent outlook reset should be “a clearing event for the stock,” said the analyst, who appreciates the setup into 2023 and beyond with Fixed RNA Profiling and CytAssist experiencing robust preliminary traction and Xenium on track for year-end.
According to Insider Monkey’s data, 17 hedge funds were bullish on 10x Genomics, Inc. (NASDAQ:TXG) at the end of June 2022, with combined stakes worth $512.6 million. In Q2 2022, SRS Investment Management was a notable position holder in the company, with 2.75 million shares worth $124.8 million.
In addition to Autodesk, Inc. (NASDAQ:ADSK), UiPath Inc. (NYSE:PATH), and monday.com Ltd. (NASDAQ:MNDY), 10x Genomics, Inc. (NASDAQ:TXG) is one of the Cathie Wood stocks to buy before the bull run starts.
Here is what ClearBridge All Cap Growth Strategy has to say about 10x Genomics, Inc. (NASDAQ:TXG) in its Q4 2021 investor letter:
“We also established a position in 10x Genomics (TXG). TXG is the dominant player in single-cell analysis and enjoys a duopoly in spatial profiling, two emerging areas of scientific research. Though the company is not yet profitable, we are attracted to the business’s strong gross margin profile and a high degree of visibility as consumables account for 85% of revenue. We also continue to see opportunities for investment in other disruptive areas of health care with large addressable markets, like diabetes.”
Click to continue reading and see 5 Cathie Wood Stocks to Buy Before the Bull Run Starts.
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Disclosure: None. 10 Cathie Wood Stocks to Buy Before the Bull Run Starts is originally published on Insider Monkey.
