12 Best ARK Stocks To Buy Now

Published on August 30, 2022 at 3:24 pm by Fatima Farooq in Hedge Funds, News

In this article, we will be taking a look at the 12 best ARK stocks to buy now. To skip our detailed analysis of these stocks and ARK Investment Management’s 13F holdings, you can go directly to see the 5 Best ARK Stocks To Buy Now.

This June, ARK Investment Management’s CEO Cathie Wood, on CNBC’s Squawk Box, commented that the American economy is in a downturn that she had initially underestimated. The lasting inflation in the economy is something that has plunged the US into a state of recession caused by supply chain disruptions alongside geopolitical risks. The unforeseeable Russian invasion of Ukraine has only worsened the problem, according to Wood, setting the US up for deflation.

While the grave state of the economy has been tough on Wood’s flagship fund, according to the ARK CEO herself, her clients have continued supporting her. Investors continue to seek diversification in an economic downturn, leading to over $180 million being poured into the ARK Innovation ETF in June alone. Wood believed that disruptive innovation is the key to solving the economic problem.

Holding stakes in major companies such as Coinbase Global, Inc. (NASDAQ:COIN), Pfizer Inc. (NYSE:PFE), and Alphabet Inc. (NASDAQ:GOOG), Wood has managed to weather the storm. In July, the ARK Innovation Fund was on track to post its first monthly gain in eight months, according to Reuters. The fund was up 11.3% that month, helped in part by Tesla, Inc.’s (NASDAQ:TSLA) 27% gain and Coinbase Global, Inc.’s (NASDAQ:COIN) 35% gain that month.

Cathie Wood of ARK Investment Management

We can now take a look at the 12 best ARK stocks to buy now.

Our Methodology

We have gone through Cathie Wood’s latest 13F holdings, as of the second quarter of 2022, to pick some of her favorite stock picks. These stocks have growth potential as demonstrated by their price targets and EPS growth expectations over the next three to five years. These stocks are also popular among the 895 hedge funds we tracked in the second quarter. They are ranked based on ARK Investment Management’s stake in them, from the lowest figure to the highest.

Best ARK Stocks To Buy Now

12. Microsoft Corporation (NASDAQ:MSFT)

ARK Investment’s Stake Value: $8,306,000

Percentage of ARK Investment’s 13F Portfolio: 0.04%

Number of Hedge Fund Holders: 258

Microsoft Corporation (NASDAQ:MSFT) is a major information technology company, and one of the Big Tech companies. It supports software, services, devices and solutions globally.

An Outperform rating was kept on Microsoft Corporation (NASDAQ:MSFT) shares on July 27, by Daniel Ives at Wedbush. The analyst also placed a $320 price target on the stock.

Wedbush Securities named three top tech stock picks this August, for the remainder of the year. Microsoft Corporation (NASDAQ:MSFT) was among the selected stocks. Analyst Ives believes the company’s Azure cloud computing platform will stay strong in fiscal 2023 as well, and that Microsoft Corporation (NASDAQ:MSFT) will benefit as a result.

Fisher Asset Management was the largest stakeholder in Microsoft Corporation (NASDAQ:MSFT) in the second quarter, out of 258 hedge funds long the stock in total. Ken Fisher’s stake in the company was made up of 28.7 million shares worth $7.4 billion. The total stake value of all hedge funds holding stakes in the company was over $56 billion.

Investment management company Ave Maria mentioned Microsoft Corporation (NASDAQ:MSFT) in its second quarter 2022 investor letter. Here’s what the firm said:

“Microsoft Corporation (NASDAQ:MSFT)’s cloud business is nearly half of the company’s revenue and the largest business in Microsoft, with Office 365 being the second largest. The cloud business helps customers save money, so it is somewhat recession-proof. Office 365 allows customers to purchase low annual subscriptions, as opposed to purchasing expensive license agreements every few years. This could keep the revenue stable in a tough economic environment. We believe the company will be able to maintain mid-teen revenue growth for the foreseeable future.”

11. Amazon.com, Inc. (NASDAQ:AMZN)

ARK Investment’s Stake Value: $8,631,000

Percentage of ARK Investment’s 13F Portfolio: 0.05%

Number of Hedge Fund Holders: 252

Amazon.com, Inc. (NASDAQ:AMZN) is another Big Tech company. It focuses on the retail sale of consumer products in the US and globally.

On 24 August, Bernstein’s Mark Shmulik reiterated an Outperform rating on Amazon.com, Inc. (NASDAQ:AMZN) shares. The analyst also placed a $160 price target on the stock.

This August, BofA noted that Amazon.com, Inc. (NASDAQ:AMZN) increased its e-commerce growth rates in the third quarter of 2022. According to the firm, the company’s growth rose to 17% in the third quarter, compared to 5% in the previous quarter. BofA expects Amazon.com, Inc. (NASDAQ:AMZN) to increase its e-commerce market share through 2024.

There were 252 hedge funds long Amazon.com, Inc. (NASDAQ:AMZN) in the second quarter. Their total stake value was over $30 billion.

Vulcan Value Partners, an investment management firm, mentioned Amazon.com, Inc. (NASDAQ:AMZN) in its second quarter 2022 investor letter. Here’s what it said:

“Amazon.com Inc. (NASDAQ:AMZN) has three components to its business model: online retail, cloud-based Amazon Web Services (AWS), and online advertising. We believe that the stock price has declined primarily due to its disappointing online retail results. Retail was extremely successful during COVID, and Amazon spent immensely to protect the consumer experience including buying extra inventory, buying inventory ahead of time, securing alternate shipping routes and adding extra warehouse space.

We believe this long-term behavior has been successful for Amazon as customer retention and engagement remain at high levels. Post-COVID, the company is in the process of rightsizing its cost structure, and it is facing a tough period of comparisons. The retail segment is the smallest contributor to our overall value. The majority of the company’s value is in AWS, which we believe is one of the best businesses in the world. AWS’ revenue is expected to be approximately $80 billion this year, which is nearly double the amount in 2020.

The company’s online advertising has turned into an attractive business that did not exist 15 years ago, and we estimate its revenue to be around $40 billion this year.”

10. Alphabet Inc. (NASDAQ:GOOG)

ARK Investment’s Stake Value: $32,998,000

Percentage of ARK Investment’s 13F Portfolio: 0.19%

Number of Hedge Fund Holders: 153

Alphabet Inc. (NASDAQ:GOOG) is yet another popular name in the tech industry, offering various communication services products and platforms. The company operates in the US, Europe, the Middle East, Africa, the Asia Pacific, Canada, and Latin America.

Ivan Feinseth, an analyst at Tigress Financial, holds a Strong Buy rating on Alphabet Inc. (NASDAQ:GOOG) shares as of August 3. Feinseth also raised his price target on the stock from $183 to $186.

Alphabet Inc. (NASDAQ:GOOG) had revenue of $69.7 billion in the second quarter, up 12.6% year over year and beating the previous quarter’s $68 billion revenue. The company’s EPS is expected to grow by 13.8% over the next three to five years.

Out of 895 hedge funds tracked in the second quarter, 153 hedge funds were long Alphabet Inc. (NASDAQ:GOOG), with a total stake value of $22.3 billion. In comparison, 160 hedge funds were long the stock in the previous quarter, with a total stake value of $29.7 billion.

Investment management company Arch Capital mentioned Alphabet Inc. (NASDAQ:GOOG) in its second quarter 2022 investor letter. Here’s what the firm said:

“In May we decided to buy Alphabet Inc. (NASDAQ:GOOG) (parent company of Google, YouTube, and Android). Our thesis was simple. Alphabet has billions of locked-in users around the globe with businesses like Search, Maps, and YouTube that should grow in-line or faster than worldwide GDP. With all the cash these businesses generate, management is able to reinvest in Google Cloud, Other Bets projects like Waymo, and return cash to shareholders via share repurchases. At an enterprise value-to-free cash flow (EV/FCF) of around 20 at the time of our purchase, we believe this sets up shareholders for low risk 15%+ returns over the next five years.”

9. Pfizer Inc. (NYSE:PFE)

ARK Investment’s Stake Value: $38,940,000

Percentage of ARK Investment’s 13F Portfolio: 0.23%

Number of Hedge Fund Holders: 70

Pfizer Inc. (NYSE:PFE) is a renowned healthcare and pharmaceutical company. It discovers, develops, and sells biopharmaceutical products across the globe.

Barclays analyst Carter Gould holds an Equal Weight rating on shares of Pfizer Inc. (NYSE:PFE) as of August 1. The analyst also raised his price target on the stock from $50 to $52.

This August, in light of news that the FDA is moving to clear Omicron booster shots, shares of Pfizer Inc. (NYSE:PFE) gained. The company is set to benefit from the clearance of the vaccine, as it will allow vaccine producers like Pfizer Inc. (NYSE:PFE) to roll out around 175 million doses of updated booster shots.

Our hedge fund data shows 70 hedge funds long Pfizer Inc. (NYSE:PFE) in the second quarter, with a total stake value of $2.8 billion. Of these funds, AQR Capital Management was the largest stakeholder in the company, holding 10.6 million shares worth $553.9 million.

Coinbase Global, Inc. (NASDAQ:COIN) and Alphabet Inc. (NASDAQ:GOOG) are among ARK Investment Management’s top holdings as of the close of the second quarter. Like these stocks, Pfizer Inc. (NYSE:PFE) is also among the more popular stocks in Wood’s 13F Holdings.

8. Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS)

ARK Investment’s Stake Value: $118,664,000

Percentage of ARK Investment’s 13F Portfolio: 0.7%

Number of Hedge Fund Holders: 20

Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) is a government contractor of the US Department of Defense. The company offers microwave electronic products, space and satellite communications, training and cybersecurity, and defense and rocket support services, among more.

A Buy rating was reiterated on Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) shares on July 26, by analyst Austin Moeller at Canaccord. The analyst also holds a $23 price target on the shares.

Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) had an EPS of $0.07 in the second quarter, beating estimates by $0.03. The company’s revenue was $224.2 million, also beating estimates by $13.6 million.

Kratos Defense & Security Solutions, Inc. (NASDAQ:KTOS) was found among the 13F holdings of 20 hedge funds tracked in the second quarter. Their total stake value in the stock was $160 million. In the previous quarter, 17 hedge funds were long the stock, with a total stake value of $248.9 million.

7. NVIDIA Corporation (NASDAQ:NVDA)

ARK Investment’s Stake Value: $126,201,000

Percentage of ARK Investment’s 13F Portfolio: 0.74%

Number of Hedge Fund Holders: 84

BMO Capital’s Ambrish Srivastava holds an Outperform rating on NVIDIA Corporation (NASDAQ:NVDA) shares as of August 25. The analyst also has a $230 price target on the stock.

This August, several analysts noted upcoming catalysts that would accelerate NVIDIA Corporation’s (NASDAQ:NVDA) growth. Mizuho’s Vijay Rakesh sees the company’s market share in graphics processing unit training hardware and software as a major advantage, as it is estimated to be over 95% currently. KeyBanc Capital’s John Vinh also noted that NVIDIA Corporation’s (NASDAQ:NVDA) data center and automotive sales remain strong and keep growing.

As of the close of the second quarter, 84 hedge funds held stakes in NVIDIA Corporation (NASDAQ:NVDA). Their total stake value was $3.3 billion. Citadel Investment Group held the largest stake in the company, worth $2.7 billion, and held 17.7 million shares.

Like Coinbase Global, Inc. (NASDAQ:COIN), Pfizer Inc. (NYSE:PFE), and Alphabet Inc. (NASDAQ:GOOG), NVIDIA Corporation (NASDAQ:NVDA) is among the most popular stocks Cathie Wood has a stake in as of the second quarter.

6. Shopify Inc. (NYSE:SHOP)

ARK Investment’s Stake Value: $455,203,000

Percentage of ARK Investment’s 13F Portfolio: 2.69%

Number of Hedge Fund Holders: 60

Shopify Inc. (NYSE:SHOP), a commerce company, operates in Canada, the US, Europe, the Middle East, Africa, the Asia Pacific, and Latin America. The company offers merchants a platform where they can display, manage, market, and sell their products through several channels.

Kunaal Malde at Atlantic Equities upgraded Shopify Inc. (NYSE:SHOP) from Neutral to Overweight on August 11. The analyst also holds a $46 price target on the stock.

At the start of August, Shopify Inc. (NYSE:SHOP) hit a three-month high by rising by 9.6%. The stock gained in light of Meta Platforms announcing the end of Facebook Live Shopping.

There were 60 hedge funds long Shopify Inc. (NYSE:SHOP) in the second quarter, and 72 hedge funds long the stock in the previous quarter. Their total stake values were $3.3 billion and $5.8 billion, respectively.

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