In this article, we will be taking a look at the 5 best ARK stocks to buy now. To read our detailed analysis of these stocks and ARK Investment Management’s 13F holdings, you can go directly to see the 12 Best ARK Stocks To Buy Now.
5. Coinbase Global, Inc. (NASDAQ:COIN)
ARK Investment’s Stake Value: $699,091,000
Percentage of ARK Investment’s 13F Portfolio: 4.13%
Number of Hedge Fund Holders: 29
Coinbase Global, Inc. (NASDAQ:COIN), a crypto company, offers retailers a primary financial footprint in the US crypto economy. It is based in Wilmington, Delaware.
Christopher Brendler at DA Davidson holds a Buy rating on Coinbase Global, Inc. (NASDAQ:COIN) shares as of August 11. The analyst also raised the price target on the stock from $90 to $100.
As of the close of the second quarter, Coinbase Global, Inc. (NASDAQ:COIN) had an EPS of -$0.87, beating estimates by $0.36. The company also currently holds a working capital growth of 30.9% year over year.
Coinbase Global, Inc. (NASDAQ:COIN) had 29 hedge funds long its stock in the second quarter. Their total stake value was $1.2 billion.
Hayden Capital, an investment management firm, mentioned Coinbase Global, Inc. (NASDAQ:COIN) in its second quarter 2022 investor letter. Here’s what the firm said:
“Coinbase (NASDAQ:COIN): The crypto ecosystem moves extremely quickly, and there’s been many new developments since we first invested in Coinbase, a year ago. Most notably, crypto market cap has declined from a peak of ~$3 Trillion last fall, to ~$1.1 Trillion today (a -63% decline, and -72% peak-to-trough; LINK). Crypto is a volatile asset class, and has experienced many draw-downs of similar magnitude in the past. For example, Bitcoin was down -93% during 2011, -85% from 2013-15, and -84% from 2017-18. In this context, the latest draw-down is a pretty normal outcome for this emerging asset class.
A large reason for this volatility, is simply because there aren’t any major “real-world use cases” for the asset just yet. In our letter outlining the investment last year, we wrote that crypto is still “in the middle of ‘crossing the chasm’ into mainstream adoption & use cases, which will result in millions of mainstream users needing to transact crypto in some form”…” (Click here to see the full text)
4. Block, Inc. (NYSE:SQ)
ARK Investment’s Stake Value: $799,455,000
Percentage of ARK Investment’s 13F Portfolio: 4.72%
Number of Hedge Fund Holders: 72
Block, Inc. (NYSE:SQ) is an information technology company. It enables sellers to accept card payments by creating tools to aid the process.
An Overweight rating was kept on Block, Inc. (NYSE:SQ) shares on August 8, by Barclays’ Ramsey El-Assal. The analyst also holds a $130 price target on the stock.
This June, Block, Inc. (NYSE:SQ) announced that it is partnering with Apple and working to bring Tap to Pay on iPhone to Square sellers. The announcement resulted in the stock jumping 7%.
Block, Inc. (NYSE:SQ) was found among the 13F holdings of 72 hedge funds in the second quarter, and 84 hedge funds in the previous quarter. Their total stake values were $3.5 billion and $6.2 billion respectively.
3. Roku, Inc. (NASDAQ:ROKU)
ARK Investment’s Stake Value: $962,719,000
Percentage of ARK Investment’s 13F Portfolio: 5.69%
Number of Hedge Fund Holders: 34
Roku, Inc. (NASDAQ:ROKU), a TV-streaming platform operator, allows users to discover and access movies and TV episodes alongside live TV, news sports, shows, and more, on its platform. The company is based in San Jose, California.
On August 26, analyst Matthew Thornton at Truist reiterated a Buy rating on Block, Inc. (NYSE:SQ) shares. The analyst also has a $90 price target on the stock.
Over the next three to five years, Roku, Inc.’s (NASDAQ:ROKU) EPS is expected to grow by 0.3%. The company’s year-over-year revenue growth is currently 31.1%. Analyst Thornton at Truist continues to remain positive on Roku, Inc. (NASDAQ:ROKU) in the long run, commenting that the company is “levered” to the secular global growth of video streaming and connected TV advertising.
There were 34 hedge funds long Roku, Inc. (NASDAQ:ROKU) in the second quarter. Their total stake value was $1.4 billion.
2. Zoom Video Communications, Inc. (NASDAQ:ZM)
ARK Investment’s Stake Value: $1,028,943,000
Percentage of ARK Investment’s 13F Portfolio: 6.08%
Number of Hedge Fund Holders: 44
Zoom Video Communications, Inc. (NASDAQ:ZM) is an IT company offering a range of communication products and services. The company offers Zoom Meetings, Zoom Phone, and Zoom chat, among more.
William Power, an analyst at Baird, holds an Outperform rating on Zoom Video Communications, Inc. (NASDAQ:ZM) shares as of August 23. The analyst also has a $125 price target on the stock.
Zoom Video Communications, Inc.’s (NASDAQ:ZM) EPS in the second quarter of 2023 was $1.05, beating estimates by $0.12. Its revenue of $1.10 billion also beat the previous quarter’s revenue of $1.07 billion. Over the next three to five years, Zoom Video Communications, Inc.’s (NASDAQ:ZM) EPS is expected to grow by 16%.
Out of 895 hedge funds, 44 hedge funds held stakes in Zoom Video Communications, Inc. (NASDAQ:ZM) in the second quarter. Their total stake value was $2.9 billion.
Horos Asset Management, an investment management firm, mentioned Zoom Video Communications, Inc. (NASDAQ:ZM) in its first quarter 2022 investor letter. Here’s what they said:
“What about the other asset class that has attracted the most attention from the investment community in recent times? Here we can distinguish three major groups. First, those companies without earnings that had convinced investors of their great future growth prospects, pushing up their valuations to irrational levels. A clear example of this, which we mentioned almost two years ago (see here) is Zoom Video Communications (“Zoom”), whose market cap exceeded that of companies such as IBM or came close to that of Cisco Systems. Well, from the time we wrote about this odd situation until today, Zoom shares have collapsed nearly 80%.
Therefore, if interest rates rise (or are expected to rise), company valuations are negatively impacted. This is especially true for those businesses that generate little cash today and the market expects them to generate a lot of cash in the future. Hence the severe losses in companies that promised a lot of cash generation in the future (such as Zoom).”
1. Tesla, Inc. (NASDAQ:TSLA)
ARK Investment’s Stake Value: $1,094,679,000
Percentage of ARK Investment’s 13F Portfolio: 6.47%
Number of Hedge Fund Holders: 72
Tesla, Inc. (NASDAQ:TSLA) is the EV manufacturing company led by Elon Musk. The company also offers automotive regulatory credits, among more.
On August 29, Deutsche Bank’s Emmanuel Rosner reiterated a Buy rating on Tesla, Inc. (NASDAQ:TSLA) shares, and placed a $375 price target on the stock.
Analyst Rosner also commented that the Gigafactory Tesla, Inc. (NASDAQ:TSLA) holds in Berlin may very well be a “game-changer” in the European localized vehicle production market. Rosner expects 2023 to be a pivotal year for the company, implying that the new Gigafactory will likely boost Tesla, Inc.’s (NASDAQ:TSLA) gross margins.
Tesla, Inc. (NASDAQ:TSLA) had 72 hedge funds long its stock in the second quarter. Their total stake value was $7.2 billion.
Baron Funds, an asset management firm, mentioned Tesla, Inc. (NASDAQ:TSLA) in its second quarter 2022 investor letter. Here’s what they said:
“In 2014, before we began to invest in Tesla (NASDAQ:TSLA), I called Roger to ask whether he thought Elon Musk’s electric car business would succeed. I did not believe that Roger, an owner of dealerships that sell cars powered by internal combustion engines (ICE) would likely have a favorable opinion of Tesla’s prospects. That was principally for two reasons:
- First, automobile manufacturing and distribution is unusually complicated, capital intensive, and highly regulated, which makes profitability problematic;
- second, cars with ICE motors require extensive annual maintenance, and dealer services revenues, not profits from automobile sales, are the most important contributor to profits of perpetual licensed ICE car dealerships.
Penske Automotive Group is principally an ICE car dealer. Since electric cars are powered by batteries and need little service, franchised dealerships are incented to sell ICE not EV automobiles. Further, Roger had been a long-term director of General Motors. General Motors’ ICE automobile business would be disrupted if Tesla were successful.
Regardless, I was right to have spoken with Roger. That was since he outlined numerous issues we needed to consider, study, and question before we determined whether we believed Tesla could be a successful business…before we ultimately chose whether to invest in that company.
When we completed our initial due diligence on Tesla, which diligence has been ongoing since 2014, we decided to invest $360 million in Tesla over the next two years. I then called Roger and outlined why I thought we could earn 20 times our capital over the next 10 years. Roger was so certain I was wrong that he offered to bet me $1 million that Tesla would fail. “Roger, I can’t bet you a million dollars. First, if you are right, I couldn’t afford to pay you. Second, if I’m right, you’re my friend, and I couldn’t take your money.” We settled on a dinner bet…”
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