In this article, we discuss the 10 cloud computing stocks to buy according to Cathie Wood. You can skip our detailed analysis of Wood’s hedge fund and its recent developments, and go directly to read 5 Cloud Computing Stocks to Buy According to Cathie Wood.
Cathie Wood’s ARK Investment Management holds a portfolio value of over $41.6 billion, as of the third quarter of 2021. Cathie Wood currently serves as the CEO and CIO of ARK Investment Management.
Wood’s career as an investor started in California at The Capital Group, where she served as an Assistant Economist. Before founding ARK Investment in 2014, Wood worked at AllianceBernstein as CIO for twelve years and managed over $5 billion.
In 2020, Wood emerged as one of the most successful hedge fund managers, as her ARK Innovation ETF, the flagship exchange-traded fund, gained 150%, due to the spike in tech stocks. However, the ETF fell 17.11% in 2021, leaving all of her holdings in the bear market. Wood expects this loss to be a temporary fall and expects spectacular returns in the coming years. Recently, ARK Investment Management announced the launch of ARK Transparency ETF on Cboe Global Markets. The ETF will track the stock-price movements of the 100 most transparent companies globally.
In this article, keeping in mind the hedge fund’s inclination towards disruptive innovation, we will focus on the cloud computing stocks to buy according to Cathie Wood. Some of the notable stocks in Cathie Wood’s portfolio are Tesla Inc (NASDAQ:TSLA), Square, Inc. (NYSE:SQ), UiPath Inc. (NYSE:PATH), Zoom Video Communications, Inc. (NASDAQ:ZM), Twilio Inc. (NYSE:TWLO), and Palantir Technologies Inc. (NYSE:PLTR).
Cathie Wood of ARK Investment Management
Our Methodology:
The stocks mentioned below are the companies that deal in cloud computing or those that deploy cloud platforms in their operations. For this list, we took into account ARK Investment Management’s 13F portfolio for Q3.
Cloud Computing Stocks to Buy According to Cathie Wood
10. Veeva Systems Inc. (NYSE:VEEV)
Number of Hedge Fund Holders: 44
Veeva Systems Inc. (NYSE:VEEV) is an American cloud computing company that specializes in pharmaceutical and life sciences applications. ARK Investment Management started investing in the company during the fourth quarter of 2020, with a stake worth $82.3 million. In Q3 2021, Veeva Systems Inc. (NYSE:VEEV) accounted for 0.5% of Cathie Wood’s portfolio.
In its Q3 results, Veeva Systems Inc. (NYSE:VEEV) posted an EPS of $0.97, which beats the consensus by $0.09. The company’s revenue for the quarter stood at $476.1 million, presenting a 26.1% year-over-year growth. This October, Stifel initiated its coverage on Veeva Systems Inc. (NYSE:VEEV) with a Buy rating and a $335 price target, highlighting the company’s growth due to changing stock market dynamics.
As per Insider Monkey’s data for Q3, the number of hedge funds having stakes in Veeva Systems Inc. (NYSE:VEEV) stood at 44, the same as in the previous quarter. However, the value of these stakes grew to $1.63 billion, from $1.54 billion in Q2. Among these hedge funds, Arrowstreet Capital was the company’s largest stakeholder in Q3, holding shares worth $282.8 million.
Like Tesla Inc (NASDAQ:TSLA), Square, Inc. (NYSE:SQ), UiPath Inc. (NYSE:PATH), Zoom Video Communications, Inc. (NASDAQ:ZM), Twilio Inc. (NYSE:TWLO), and Palantir Technologies Inc. (NYSE:PLTR), Veeva Systems Inc. (NYSE:VEEV) is also appreciated by investors in the cloud computing space.
9. 2U, Inc. (NASDAQ:TWOU)
Number of Hedge Fund Holders: 22
2U, Inc. (NASDAQ:TWOU) is an American educational technology company that uses a cloud-based SaaS platform for online education.
As of Q3 2021, 22 hedge funds in Insider Monkey’s database reported owning stakes in 2U, Inc. (NASDAQ:TWOU), down from 25 in the previous quarter. The total value of these stakes is over $545.1 million.
Cathie Wood’s ARK Investment Management holds roughly 8.5 million shares in 2U, Inc. (NASDAQ:TWOU) in Q3, which represents 0.67% of the hedge fund’s 13F portfolio. The company’s Q3 results were lauded by BMO Capital, as online education was given wider acceptance due to the pandemic. Recently, the firm set a $40 price target on 2U, Inc. (NASDAQ:TWOU), while maintaining an Outperform rating on the shares.
In addition to TWOU, Cathie Wood’s Q3 portfolio has some other notable names like Tesla Inc (NASDAQ:TSLA), Square, Inc. (NYSE:SQ) and Palantir Technologies Inc. (NYSE:PLTR).
Artisan Partners mentioned 2U, Inc. (NASDAQ:TWOU) in its Q3 2021 investor letter. Here is what the firm has to say:
“2U provides cloud-based services enabling universities and alternative credentialing to launch online education programs. The company’s service—marketing, recruitment, learning and design—is provided in exchange for 60%-80% of tuition revenue (varies by course type). The company has an impressive lineup of customers, including Yale, Harvard, Columbia and London School of Economics. We believe the recent acquisition of edX, the second-largest online learning platform, solidifies 2U’s market leadership and should allow it to capture the single largest share of higher education transitioning from on-campus to online—some estimate the $2.2 trillion global higher education market is only 2% penetrated—and as alternative credentials proliferate and become more accepted.”
8. Trimble Inc. (NASDAQ:TRMB)
Number of Hedge Fund Holders: 34
An American software company, Trimble Inc. (NASDAQ:TRMB) uses a cloud engine that provides next-generation point cloud applications, widely used for tools analysis. Due to its shift to digitization among its customers, recently, Piper Sandler initiated its coverage on Trimble Inc. (NASDAQ:TRMB) with an Overweight rating and a $101 price target.
Recently, Trimble Inc. (NASDAQ:TRMB) partnered with Microsoft to enhance tech adoption and to hasten the digital transformation of the agriculture, construction, and transportation industries. ARK Investment Management started building its position in Trimble Inc. (NASDAQ:TRMB) sometime during Q4 of 2016. As of Q3 2021, the company accounts for 0.87% of Cathie Wood’s portfolio. As of the close of December 9, Trimble Inc. (NASDAQ:TRMB) surged 33.6% year-to-date, while its 12-month returns came in at 40%.
Impax Asset Management held the largest stake in Trimble Inc. (NASDAQ:TRMB) in Q3, worth $653.4 million. Overall, the hedge fund sentiment for the company remained positive in Q3, as 34 hedge funds tracked by Insider Monkey were bullish on the stock, up from 27 in the previous quarter. These stakes hold a consolidated value of $1.81 billion.
7. PagerDuty, Inc. (NYSE:PD)
Number of Hedge Fund Holders: 30
PagerDuty, Inc. (NYSE:PD), an American cloud computing company, surged 10% on December 8, after it beat Q3 estimates on all accounts. The company’s revenue grew by 33% from the prior-year quarter at $72 million. Moreover, PagerDuty, Inc. (NYSE:PD) posted an EPS of -$0.07, beating consensus by $0.02.
At the end of Q3 2021, the number of hedge funds tracked by Insider Monkey having stakes in PagerDuty, Inc. (NYSE:PD) grew to 30, from 26 in the previous quarter. These stakes are valued at over $820 million, up from $656.5 million from Q2.
ARK Investment Management grew its stake in PagerDuty, Inc. (NYSE:PD) by 17% in Q3 and now holds roughly 10 million shares. The company accounts for 0.99% of Cathie Wood’s portfolio. As the company delivered its second consecutive top-line growth of 30%, Craig Hallum, in December, set a $52 price target on PagerDuty, Inc. (NYSE:PD), while maintaining a Buy rating on the shares.
6. DocuSign, Inc. (NASDAQ:DOCU)
Number of Hedge Fund Holders: 51
DocuSign, Inc. (NASDAQ:DOCU) is an American company that provides e-signature solutions. The company’s cloud-based platform, The DocuSign Agreement Cloud, allows customers to digitally sign their documents using any device. With over 1 million customers globally, DocuSign, Inc. (NASDAQ:DOCU) remains one of the best cloud computing stocks to buy according to Cathie Wood.
Though the number of hedge funds having stakes in DocuSign, Inc. (NASDAQ:DOCU) decreased in Q3, Wall Street analysts appreciated the company as it starts to recover. Recently, Oppenheimer set a $250 price target on DocuSign, Inc. (NASDAQ:DOCU), while maintaining an Overweight rating on the shares. ARK Investment Management started building its position in the company during the third quarter of 2019, with shares worth only $36,000. As of Q3 2021, the hedge fund holds a $468.9 million worth of stake in DocuSign, Inc. (NASDAQ:DOCU), which accounts for 1.12% of its 13F portfolio.
As of Q3, 51 hedge funds tracked by Insider Monkey reported owning stakes in DocuSign, Inc. (NASDAQ:DOCU), down from 58 in Q2. The total value of these stakes is over $4.23 billion. Among these hedge funds, Tiger Global Management LLC was the company’s leading shareholder in Q3, holding a stake worth $1.88 billion.
Like Tesla Inc (NASDAQ:TSLA), Square, Inc. (NYSE:SQ), UiPath Inc. (NYSE:PATH), Zoom Video Communications, Inc. (NASDAQ:ZM), Twilio Inc. (NYSE:TWLO), and Palantir Technologies Inc. (NYSE:PLTR), analysts and investors are also paying attention to DocuSign, Inc. (NASDAQ:DOCU) in 2021.
Carillon Tower Advisers mentioned DocuSign, Inc. (NASDAQ:DOCU) in its Q2 2021 investor letter. Here is what the firm has to say:
“DocuSign provides electronic signature solutions. The firm reported an excellent quarter and investors have appreciated the strong growth combined with the excellent margins the company has posted. DocuSign has a long runway of growth ahead and we believe that it remains in a favorable position to continue gaining market share from traditional manual and paper-based signature solutions.”
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Disclosure. None. 10 Cloud Computing Stocks to Buy According to Cathie Wood is originally published on Insider Monkey.
