In this article, we will take a detailed look at Ark Invest Stock Portfolio: Top 10 Stocks to Buy.
ARK Investment Management LLC, commonly known as ARK Invest, is an American investment management firm headquartered in St. Petersburg, Florida. Founded by Cathie Wood in 2014, the firm specializes in actively managed exchange-traded funds (ETFs) focused on disruptive innovation. As of Q4 2024, ARK holds over $12 billion in 13F securities, with its top ten positions comprising slightly over 50% of its diversified portfolio, which typically comprises between 35 and 55 holdings. The firm’s investment approach spans various market capitalizations, sectors, and geographies, aiming to identify and invest in companies poised to lead in transformative technological advancements.
Cathie Wood, born Catherine Duddy Wood in 1955, is widely recognized as one of the most influential figures in the investment industry. As the founder, CEO, and chief investment officer of ARK Investment Management, she has carved out a reputation for her innovative and forward-thinking investment strategies. Wood’s approach to investing has consistently focused on identifying and capitalizing on disruptive innovation, setting her apart as a visionary in the financial sector.
After graduating from the Notre Dame Academy Catholic girls’ school, Wood pursued higher education at the University of Southern California (USC), where she earned a summa cum laude degree in finance and economics in 1981. She later completed a Master of Business Administration in finance at USC’s Marshall School of Business. A key influence in her academic journey was economist Arthur Laffer, known for the Laffer Curve, which theorizes the relationship between tax rates and tax revenue. Laffer’s mentorship helped shape Wood’s understanding of economic theory and her investment philosophy.
Wood’s career in finance took off after graduation, with roles at prestigious firms such as Jennison Associates, where she spent 18 years in various leadership roles, and Capital Group, as an assistant economist. At AllianceBernstein, where she managed over $5 billion, she honed her ability to identify long-term growth trends. Despite criticism of her investment decisions during the 2008 financial crisis, Wood remained steadfast in her belief that disruptive innovation would drive the future of economic growth. She later went on to co-found Tupelo Capital Management, a hedge fund focused on global thematic strategies.
In 2014, Cathie Wood founded ARK Invest with the goal of focusing exclusively on disruptive innovation and seizing the investment opportunities it generates. Her pioneering move involved structuring actively managed investment strategies as exchange-traded funds (ETFs), an industry-first approach that allowed a broader range of investors to participate in emerging technologies. She recognized that investing in such transformative technologies requires active management to navigate rapid changes, an open research ecosystem unrestricted by sectors, geographies, or market capitalizations to capture technological convergence, and the sharing of knowledge to deepen understanding of emerging industries. Reflecting these principles, ARK stands for Active Research Knowledge—a philosophy that underpins the firm’s investment approach.
Accordingly, ARK’s investment philosophy is centered around thematic investing in disruptive innovation, leveraging over 40 years of experience in identifying high-growth opportunities. ARK defines disruptive innovation as the introduction of technologically enabled products or services that significantly alter existing industries. The firm’s research process focuses on cross-sector innovations such as artificial intelligence, autonomous vehicles, Fintech, robotics, energy storage, DNA sequencing, 3D printing, and blockchain technology. ARK’s goal is to seek long-term capital appreciation by investing in these cutting-edge industries, believing that companies driving technological advancements will fundamentally reshape industries and offer outsized returns compared to traditional investment strategies.
Cathie Wood of ARK Investment Management
Our Methodology
The stocks discussed below were picked from Ark Invest’s Q4 2024 13F filings. They are compiled in the ascending order of the hedge fund’s stake in them as of December 31, 2024. To assist readers with more context, we have included the hedge fund sentiment regarding each stock using data from 1,009 hedge funds tracked by Insider Monkey in the fourth quarter of 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Ark Invest Stock Portfolio: Top 10 Stocks to Buy
10. Archer Aviation Inc. (NYSE:ACHR)
Number of Hedge Fund Holders as of Q4: 34
Ark Invest’s Equity Stake: $291.64 Million
On February 27, Archer Aviation Inc. (NYSE:ACHR) reported its financial results for the fourth quarter and fiscal year ending December 31, 2024. CEO Adam Goldstein highlighted the aerospace company’s progress, emphasizing that with the Launch Edition program now in place and aircraft production underway at ARC, Archer is on track to deliver its first revenue-generating Midnight aircraft later this year. He also pointed to the company’s strong liquidity position, exceeding $1 billion, as a critical asset in advancing both its civil and defense strategies while exploring emerging opportunities in artificial intelligence and other technologies. As the electric vertical takeoff and landing (eVTOL) industry gains momentum, JPMorgan analysts estimate a potential $1 trillion market by 2040, and Archer Aviation Inc. (NYSE:ACHR) is positioning itself as a leading player in this evolving sector.
Investor enthusiasm for Archer Aviation Inc. (NYSE:ACHR) continues to grow, with its market capitalization currently valued at approximately $3.35 billion. Over the past year, its stock has surged 60%, significantly outperforming the broader market. The rally has increased over the last six months, with shares soaring by 149%. Despite this optimism, the company’s financials reflect the high costs associated with scaling an eVTOL business. In the fourth quarter of 2024, operating expenses rose 15% year-over-year to $124.2 million, as the company ramped up testing and completed construction of its production facility in Covington, GA. The net loss for the quarter expanded to $198.1 million from $109.1 million a year earlier, while adjusted EBITDA loss widened to $94.8 million. Earnings per share (EPS) came in at -$0.39, falling short of estimates by 53%.
While Archer Aviation Inc. (NYSE:ACHR) remains unprofitable, its financial position remains strong, with record-high total cash reserves at an impressive $1.1 billion. This substantial financial cushion provides Archer with the resources needed to accelerate its vision for urban air mobility. Looking ahead to the first quarter of 2025, management projects an adjusted EBITDA loss between $95 million and $110 million, as the company continues its aggressive push toward commercialization and industry leadership.
9. CRISPR Therapeutics AG (NASDAQ:CRSP)
Number of Hedge Fund Holders as of Q4: 27
Ark Invest’s Equity Stake: $353.18 Million
A Swiss American biotechnology company headquartered in Zug, Switzerland, CRISPR Therapeutics AG (NASDAQ:CRSP) is dedicated to developing transformative gene-based medicines for serious diseases using its proprietary CRISPR/Cas9 platform using gene-editing technology. The company has built a diverse portfolio of therapeutic programs spanning hemoglobinopathies, oncology, regenerative medicine, and rare diseases, positioning itself at the forefront of genetic innovation.
By the end of Q4 2024, Art Invest significantly increased its holdings in CRISPR Therapeutics AG (NASDAQ:CRSP) to approximately 9 million shares, marking a 20% rise from 7.5 million shares in Q3. The fund’s stake in the company is now valued at over $353 million. Insider Monkey’s database indicated that 27 hedge funds out of the 1,009 hedge funds held stakes in the company at the end of Q4 2024, with a value of nearly $687 million.
As of December 31, 2024, CRISPR Therapeutics AG (NASDAQ:CRSP) reported a strong cash position of $1.9 billion, up from $1.7 billion the previous year. This increase was primarily driven by proceeds from a $280 million registered direct offering in February 2024, milestone payments from Vertex Pharmaceuticals under collaboration agreements, and revenue from ATM activity and employee option exercises, as well as interest income, which helped offset operating expenses. Despite reporting a net loss of $37.3 million in Q4 2024, compared to a net income of $89.3 million in the same period the previous year, the company’s robust financial foundation and strategic partnerships position it well for future growth. With its strong liquidity and promising gene-editing technology, CRISPR Therapeutics AG (NASDAQ:CRSP) remains a top stock to buy despite its current net loss.
8. Block, Inc. (NYSE:XYZ)
Number of Hedge Fund Holders as of Q4: 81
Ark Invest’s Equity Stake: $418.82 Million
Block, Inc. (NYSE:XYZ) is a leading American technology company specializing in financial services for both consumers and merchants. Founded in 2009 by Jack Dorsey, the company has established itself as the U.S. market leader in point-of-sale systems, offering innovative payment solutions that empower businesses of all sizes. Through its ecosystem of financial products, including Square, Cash App, and Afterpay, Block continues to drive the evolution of digital commerce and financial accessibility.
With a market capitalization of $47.31 billion, Block, Inc. (NYSE:XYZ) reported its fourth-quarter 2024 earnings, missing both earnings per share and revenue forecasts. Reported EPS stood at $0.71, falling short of the expected $0.86, while revenue reached $6.03 billion, missing the forecasted $6.24 billion. The company’s stock reacted negatively in aftermarket trading, dropping 7% following the announcement. Despite this quarterly miss, Block’s long-term financial performance remains strong, driven by growth in its key segments, Square and Cash App.
For the full year 2024, Block, Inc. (NYSE:XYZ) delivered robust financial results, reporting a gross profit of $8.89 billion, an 18% increase year-over-year. The Square and Cash App divisions contributed significantly, with gross profit growth of 15% and 21%, respectively. Adjusted EBITDA surged by 69% to $3.03 billion, while adjusted operating income grew 4.5 times to $1.61 billion. Additionally, the company’s adjusted free cash flow saw an impressive jump to $2.07 billion from $515 million the previous year. Looking ahead, Block, Inc. (NYSE:XYZ) has set an ambitious gross profit target of at least $10.22 billion for 2025, representing a projected 15% growth.
Despite the short-term stock decline, analysts suggest that Block remains undervalued, presenting a potential buying opportunity. The stock has gained 29.3% over the past six months, demonstrating strong momentum. Moreover, Block maintains a solid financial position, with a current ratio of 2.07, reflecting strong liquidity. With its continued focus on innovation and expanding financial services, Block, Inc. (NYSE:XYZ) is well-positioned for future growth, even as market volatility remains a factor with its beta at 2.52.
7. Shopify Inc. (NYSE:SHOP)
Number of Hedge Fund Holders as of Q4: 64
Ark Invest’s Equity Stake: $479.02 Million
Shopify Inc. (NYSE:SHOP) delivered stronger-than-expected revenue for the fourth quarter, though it fell short on earnings. The popular e-commerce platform reported adjusted earnings per share of $0.39, missing analysts’ expectations of $0.43. However, revenue exceeded forecasts, reaching $2.81 billion compared to the anticipated $2.73 billion. This marked a significant 31% increase from the $2.14 billion reported in the same quarter of the previous year, reflecting Shopify’s continued growth and strong merchant activity.
Despite the earnings miss, Shopify Inc. (NYSE:SHOP) remains optimistic about its trajectory. The company noted that the strong merchant momentum seen in Q4 is expected to carry into the first quarter, though it acknowledged that Q1 is traditionally its lowest quarter in terms of gross merchandise volume. This outlook signals confidence in Shopify’s ability to sustain growth, driven by its expanding ecosystem and increasing adoption of its commerce solutions.
Shopify Inc. (NYSE:SHOP)’s earnings report comes amid ongoing adjustments in the e-commerce industry following former President Donald Trump’s recent tariffs on the nation’s top three trading partners and his decision to close the long-standing de minimis trade loophole, commonly used by Chinese online retailers. The abrupt change disrupted customs processes and U.S. Postal Service operations, prompting Trump to sign an executive order temporarily reinstating the rule. On an investor call, Shopify President Harley Finkelstein emphasized the importance of the de minimis exception for small businesses, stating that it helps lower shipping costs and enables them to compete on a larger scale. He also advocated for broader reforms to the rule to ensure continued support for global commerce.
RiverPark Large Growth Fund stated the following regarding Shopify Inc. (NYSE:SHOP) in its Q4 2024 investor letter:
“Shopify Inc. (NYSE:SHOP): Shopify was a top contributor in the fourth quarter following a strong 3Q earnings report that included better than expected revenue growth and continued margin expansion. GMV growth of 24% was three percentage points above investor estimates, revenue of $2.2 billion was $40 million better and free cash flow of $421 million was $80 million better. A combination of new merchants to the company’s platform, increased adoption of SHOP’s offerings by existing merchants, and e-commerce market share gains are driving this revenue growth and profitability.
In 2023, 10% of US retail e-commerce sales flowed through SHOP, second only to Amazon, and the company is still enjoying significant tailwinds as retail merchants of all sizes adopt SHOP’s software tools to display, manage and sell their products across a dozen different sales channels. We believe that the overall growth of e-commerce, combined with the development of new products and services, such as its digital wallet Shop Pay, should continue to drive revenue growth of more than 20% per year over the next several years, accompanied by re-acceleration of operating margin growth and FCF generation.”
6. Robinhood Markets, Inc. (NASDAQ:HOOD)
Number of Hedge Fund Holders as of Q4: 79
Ark Invest’s Equity Stake: $480.92 Million
Robinhood Markets, Inc. (NASDAQ:HOOD), headquartered in Menlo Park, California, is a leading financial services company known for its electronic trading platform and cryptocurrency wallet. In Q4 2024, the company reported revenue exceeding $1 billion, bringing its full-year total to over $3 billion, a remarkable 58% increase from 2023. This surge was driven by the successful launch of new products, including the Robinhood Gold Card, Robinhood Legend, and its expanding derivatives business, all designed to meet the needs of its active trading community. By broadening its product offerings and enhancing user engagement, Robinhood Markets, Inc. (NASDAQ:HOOD) has positioned itself as a key player in the financial technology sector, demonstrating its ability to scale operations while delivering substantial revenue growth.
One of its standout innovations, Robinhood Legend, has already generated $50 million in annualized trading revenue. The company also achieved a record $50 billion in customer deposits, marking a nearly 50% increase. Additionally, subscriptions to its premium Robinhood Gold service grew by 80%, with approximately 10% of all users opting for the membership. Notably, over 30% of new customers in Q4 2024 chose Gold, highlighting the increasing demand for Robinhood’s premium features. With strong financial momentum, expanding product offerings, and growing investor confidence, Robinhood Markets, Inc. (NASDAQ:HOOD) remains a compelling investment opportunity poised for continued success.
By the end of Q4 2024, institutional interest in Robinhood Markets, Inc. (NASDAQ:HOOD) had surged, with 79 hedge funds in Insider Monkey’s database holding positions worth $4.62 billion, a significant increase from the previous quarter’s 36 hedge funds with investments totaling $2.19 billion. This rising confidence from institutional investors underscored the company’s growth potential and set the stage for an impressive financial performance in the following year.
Baron FinTech Fund stated the following regarding Robinhood Markets, Inc. (NASDAQ:HOOD) in its Q4 2024 investor letter:
“We also initiated a position in Robinhood Markets, Inc. (NASDAQ:HOOD) during the quarter. Robinhood is an online brokerage that offers free trading across stocks, options, and cryptocurrencies. Baron Capital has long invested in successful brokerage companies such as Charles Schwab, Interactive Brokers, and LPL Financial. We first met Robinhood in 2021 during their IPO process. Customers were using Robinhood because of its low-cost offering and simple user interface that makes trading easy and accessible. While we were impressed with management’s success in building a modern brokerage with a large user base and strong product-market fit, we were hesitant to invest at a cyclical peak in trading activity and fintech valuations during the middle of the COVID-era meme-stock craze. Following the IPO, trading activity soon normalized, and the share price fell significantly.
After revisiting the company this past year, we believe Robinhood is a much-improved business today. Departing from its early reputation as a gamified enabler of retail speculation in meme stocks, Robinhood has been professionalized and transformed into a more durable company that can reliably gain market share and grow earnings over the long term. Some examples of the company’s maturation include: 1) providing retirement accounts that should create larger and longer-lasting client relationships; 2) launching the Gold subscription service that delivers additional value to Robinhood’s best customers; 3) introducing the web-based Legend platform that offers more advanced features for active traders; and 4) exercising expense discipline to right-size the cost base and deliver profitability alongside growth. These efforts have delivered strong financial results, with Robinhood generating annualized net new asset growth of 29%, custodied asset growth of 76%, and an adjusted EBITDA margin of 42% in the most recent quarter. Average revenue per user has also increased significantly from $60 in 2022 to $107 in the first nine months of 2024 across more than 24 million funded accounts. The customer retention rate is a very strong 95%, up from 80% three years ago…” (Click here to read the full text)
5. Roblox Corporation (NYSE:RBLX)
Number of Hedge Fund Holders as of Q4: 61
Ark Invest’s Equity Stake: $586.85 Million
Founded in 2006 and headquartered in San Mateo, California, Roblox Corporation (NYSE:RBLX) has been a long-standing player in the gaming industry but has only recently gained mainstream recognition. This surge in popularity significantly boosted its valuation, climbing from $2.5 billion in 2018 to nearly $38 billion upon its debut on the New York Stock Exchange in 2021. In 2024, Roblox reported a revenue of $3.6 billion, reflecting a 28.7% year-over-year increase. The company also paid out $923 million to creators, reinforcing its commitment to supporting user-generated content and expanding its virtual economy.
Roblox CEO David Baszucki highlighted the company’s focus on innovation and fostering meaningful connections within its digital ecosystem. He emphasized Roblox Corporation (NYSE:RBLX)’s ambition to capture 10% of the global gaming content market while continuing to invest in its virtual economy, AI-powered discovery, and platform safety. Chief Financial Officer Michael Guthrie echoed this sentiment, noting that Q4 2024 results met or exceeded previous guidance. Full-year revenue and bookings increased by 29% and 24%, respectively, showcasing the scalability and efficiency of the company’s business model.
Roblox Corporation (NYSE:RBLX)’s financial performance in 2024 demonstrated strong growth; the company achieved $3.6 billion in revenue and $4.37 billion in bookings, marking a 29% and 24% year-over-year increase, respectively. Adjusted EBITDA stood at $180.2 million, while cash provided by operating activities climbed 79% to $822.3 million. Free cash flow also experienced substantial growth, reaching $641.3 million, underscoring Roblox’s ability to generate liquidity while investing in future expansion.
Looking ahead, Roblox Corporation (NYSE:RBLX) projects continued financial momentum in 2025, forecasting full-year revenue between $4.25 billion and $4.35 billion, with bookings expected to reach between $5.2 billion and $5.3 billion. The company anticipates a consolidated net loss between $995 million and $1.07 billion, alongside an adjusted EBITDA range of $190 million to $265 million. Operating cash flow is estimated to be between $1.05 billion and $1.11 billion, while free cash flow is projected between $800 million and $860 million. With strategic investments in technology, content, and monetization strategies, Roblox remains well-positioned for long-term growth and expansion.
SaltLight Capital stated the following regarding Roblox Corporation (NYSE:RBLX) in its Q3 2024 investor letter:
“Roblox Corporation (NYSE:RBLX) has firmly established itself as the dominant player in user-generated gaming within Western markets. Meanwhile, Tencent has developed a similar ecosystem in China with its WeChat Mini-games platform. Owning both gives us a unique vantage point to assess the evolving landscape of user-generated gaming platforms globally.
At its recent investor day, Roblox set an ambitious target of reaching 10% of gaming content revenue, of which it estimates the total pool is around $180bn (for context, in the last twelve months, it made $4bn in bookings).
We think this will be a challenging target, but it will be positive for the business directionally. The reason is that Roblox has spent the last three years heavily investing in re-engineering its game platform to be high fidelity, performant and widely available across platforms. They also share economics with their creators to the point now that the absolute numbers in highly engaged games are enough to support a small game studio. The result is that the quality of games has materially improved, attracting additional engagement – particularly from older users…” (Click here to read the full text)
4. Palantir Technologies Inc. (NASDAQ:PLTR)
Number of Hedge Fund Holders as of Q4: 64
Ark Invest’s Equity Stake: $589.42 Million
Palantir Technologies Inc. (NASDAQ:PLTR) is a data analytics company that builds software platforms for data-driven operations and decision-making, primarily focused on helping government agencies and organizations analyze and visualize data from various sources. It reported its financial results for Q4 and fiscal year 2024 on February 3, 2025, with CEO Alexander C. Karp emphasizing the company’s integral role in the AI revolution. Karp highlighted how Palantir’s early predictions about the commoditization of large language models have materialized, reinforcing the company’s strategic direction. He also acknowledged the contributions of Palantir employees, noting their efforts in driving growth and the well-earned rewards from market-vesting stock appreciation rights (SARs). His statement reflects confidence in Palantir’s ability to maintain its leadership in AI-driven analytics and software solutions.
For Q4 2024, Palantir Technologies Inc. (NASDAQ:PLTR) reported strong growth across key financial metrics. Total revenue increased 36% year-over-year to $828 million against expectations of $776 million, with U.S. revenue growing 52% to $558 million. The company closed 129 deals worth at least $1 million, with 32 surpassing $10 million, showcasing robust enterprise demand. Customer count rose by 43% year-over-year, and Palantir Technologies Inc. (NASDAQ:PLTR) achieved a net income of $79 million and an EPS of $0.14 against analyst predictions of $0.11, underscoring its ability to drive profitability while scaling its operations.
For the full year 2024, Palantir recorded a 29% year-over-year revenue increase to $2.87 billion, with notable growth in both its U.S. government and commercial sectors. U.S. commercial revenue surged 54% to $702 million, while government revenue climbed 30% to $1.2 billion. Palantir Technologies Inc. (NASDAQ:PLTR) reported net income of $462 million and income from operations of $1.13 billion. With $5.2 billion in cash, cash equivalents, and short-term U.S. Treasury securities, Palantir is well-positioned for continued expansion in 2025.
By the end of Q4 2024, hedge fund interest in Palantir Technologies Inc. (NASDAQ:PLTR) had grown significantly, with 64 hedge funds holding positions valued at $3.88 billion. This marked a substantial increase from the prior quarter, where 43 hedge funds had investments totaling $3.09 billion. This rising institutional confidence indicates Palantir’s continued expansion and strong financial performance in the following year.
Baron Asset Fund stated the following regarding Palantir Technologies Inc. (NASDAQ:PLTR) in its Q4 2024 investor letter:
“Two software stocks that the Fund did not own, Palantir Technologies Inc. (NASDAQ:PLTR) and AppLovin Corporation, each gained more than 100% and accounted for 52% of the Benchmark’s gain during the quarter. At year end 2024, Palantir was valued at approximately 200 times its expected 2024 earnings, while AppLovin was valued at 80 times. The market cap of each exceeded $100 billion, and the two stocks represented nearly 8% of the Index. Neither company met our criteria for investment. The total impact on relative performance from Palantir and AppLovin was about 7 times higher than we have seen historically for two securities that are unique to the Benchmark, showing just how unparalleled the event was and something that we believe is unlikely to be repeated.”
3. Coinbase Global, Inc. (NASDAQ:COIN)
Number of Hedge Fund Holders as of Q4: 69
Ark Invest’s Equity Stake: $753.5 Million
Coinbase Global, Inc. (NASDAQ:COIN) operates a cryptocurrency exchange platform, enabling users to buy, sell, transfer, and store digital assets in the US and internationally. The company delivered a strong financial performance in Q4 2024, reporting an adjusted EBITDA of $3.3 billion, marking its second consecutive year of positive adjusted EBITDA. Trading volume surged to $439 billion, reflecting heightened customer engagement and increased market activity. Revenue reached $2.27 billion, far surpassing the expected $1.59 billion, and demonstrating a year-over-year growth of almost 143%. The reported Q4 earnings per share of $4.68 significantly exceeded the forecasted $1.36. Net income stood at $1.3 billion, bolstered by $476 million in pretax gains from crypto asset investments. Subscription and services revenue also showed strong growth, rising 15% quarter-over-quarter to $641 million.
Despite the outstanding financial results, Coinbase Global, Inc. (NASDAQ:COIN)’s stock declined by 1.47% in after-hours trading, closing at $293.72. This downturn followed an earlier 8.44% rally during regular trading hours. The stock movement suggests that while investors recognized Coinbase’s strong earnings, they may have been influenced by broader market trends or concerns about sustainability amid crypto market volatility.
Coinbase Global, Inc. (NASDAQ:COIN) has faced a challenging few weeks, with its stock declining about 30% since mid-February and 40% since its 52-week high in December. However, analysts see this as a buying opportunity, citing the exchange’s strong positioning amid the Trump administration’s pro-crypto policies. Rosenblatt Analyst Chris Brendler initiated coverage with a Buy rating and a $305 price target, highlighting Coinbase as the sector’s “clear blue chip” with resilience in both bull and bear markets. He noted that the company’s growing non-trading revenue will help it weather future downturns, though recent declines stem from political uncertainty and fluctuating tariffs. Brendler remains optimistic, describing the current environment as a “Crypto Spring” and emphasizing Coinbase’s market dominance due to its brand strength, liquidity, and user experience. He also believes regulatory clarity will drive more institutional adoption, reinforcing Coinbase’s leadership.
Patient Capital Management stated the following regarding Coinbase Global, Inc. (NASDAQ:COIN) in its Q4 2024 investor letter:
“The top performers in the fourth quarter were once again Financials and Travel names. We’ve been over-indexed to them since the pandemic, which has served us well. We strategically added to certain financial names like Sofi Technologies (SOFI) and Coinbase Global, Inc. (NASDAQ:COIN) during the year. Both companies rebounded strongly in the fourth quarter. We believe Coinbase is building the platform for the crypto ecosystem. Certain recent advances (wallet, base improvements, USD Coin) could cause an adoption tipping point. We like that Coinbase continues to widen its moat by persistently investing in innovation.”
2. Roku, Inc. (NASDAQ:ROKU)
Number of Hedge Fund Holders as of Q4: 37
Ark Invest’s Equity Stake: $793.35 Million
Roku, Inc. (NASDAQ:ROKU) exceeded expectations in Q4 2024, reporting a 22% revenue increase and a significantly reduced net loss. The company ended the year with 89.8 million streaming households, marking a 12% year-over-year increase and a gain of 4.3 million from the prior quarter. However, Roku announced that it will no longer report household metrics on a quarterly basis, shifting focus toward revenue and profitability. The company posted Q4 revenue of $1.201 billion and a net loss of $35.5 million, or -$0.24 per share, compared to analysts’ expectations of $1.15 billion in revenue and an EPS of -$0.43. Operating expenses saw only a slight increase of 2%, totaling $551.7 million. Roku, Inc. (NASDAQ:ROKU) highlighted its expanding U.S. presence, with its platform now reaching over half of broadband households.
Roku’s Platform business, which includes advertising, content sales, and subscription revenue sharing, contributed $1.04 billion to Q4 revenue. Political ad spending accounted for about 6% of this total, while advertising sales outpaced overall platform revenue growth, surpassing both the broader ad market and the OTT ad sector in the U.S. Roku, Inc. (NASDAQ:ROKU) reported a strong gross margin of 54% for Q4, exceeding its own forecasts due to a favorable shift in revenue mix. For the full year 2024, Roku’s overall gross margin stood at 53.5%. This performance underscores the company’s ability to drive profitability in its core business segments while maintaining steady revenue growth.
Roku, Inc. (NASDAQ:ROKU) anticipates achieving operating income profitability for the full year 2026. For Q1 2025, the company projects total net revenue of $1 billion, a 14% increase year-over-year. Roku expects total gross profit of $450 million, adjusted EBITDA of $55 million, and a net loss of $40 million. For the full year 2025, the company forecasts net revenue of $4.61 billion, total gross profit of $2 billion, and adjusted EBITDA of $350 million. With strong growth projections and a path to profitability, Roku remains one of the top stocks to buy.
1. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders as of Q4: 126
Ark Invest’s Equity Stake: $1.33 Billion
Tesla, Inc. (NASDAQ:TSLA)’s Q4 2024 earnings report presented mixed results, with net sales rising 2.15% year-over-year to $25.71 billion, while operating profit dropped 23.3% to $1.58 billion. Earnings per share came in at $0.73, missing analyst expectations by 4.8%. Despite a stock rally driven by speculation over potential policy benefits under President Trump’s administration, Tesla faced substantial challenges, including its first annual decline in vehicle deliveries, which totaled 1.8 million units. To counter slowing demand, the company introduced aggressive price cuts, particularly in North America and China.
While Elon Musk remains committed to advancing autonomy and robotics, Tesla, Inc. (NASDAQ:TSLA) continues to lag behind competitors like Waymo, WeRide, and Pony.ai in the robotaxi market. Musk has announced plans to launch “unsupervised” Full Self-Driving (FSD) in Austin by June and hinted at potential licensing deals, but concerns remain over the technology’s readiness. However, the company’s energy division was a strong performer, generating $3.06 billion in revenue, marking an impressive 113% increase from the previous year.
On March 10, 2025, Tesla, Inc. (NASDAQ:TSLA) shares plummeted by over 15% to $222, marking their lowest closing price since October 23 and their worst percentage loss since 2020. Tesla stock has fallen 53% from its December peak and 12% since Election Day, with its market capitalization shrinking by nearly $800 billion. This drop contributed to a broader market decline, with the tech-heavy Nasdaq Composite slipping 4% amid concerns over Trump’s economic policies. Despite Elon Musk’s $288 million donation to Trump and GOP election efforts, Tesla, Inc. (NASDAQ:TSLA) faces mounting challenges, including Trump’s tariffs affecting supply chains and weaker sales in China and Europe. Analysts warn that Musk’s political affiliations are eroding Tesla’s brand reputation, further exacerbating the company’s struggles in its second-largest market and beyond.
Overall, Tesla, Inc. (NASDAQ:TSLA) ranks first on our list of the top 10 stocks to buy according to Ark Invest. While we acknowledge the potential for TSLA as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than TSLA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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