Ark Invest Stock Portfolio: Top 5 Picks

In this article, we discuss the top 5 stock picks of ARK Invest. If you want to read our detailed discussion on Cathie Wood, head directly to Ark Invest Stock Portfolio: Top 11 Picks. 

5. Block, Inc. (NYSE:SQ)

ARK Invest’s Stake Value: $714,092,071

Number of Hedge Fund Holders: 64

Block, Inc. (NYSE:SQ) develops solutions to process card transactions, while also offering reporting, data analysis, and next-day fund settlement capabilities. It is one of the top holdings from the Cathie Wood stock portfolio. On August 3, Block, Inc. (NYSE:SQ) reported a Q2 non-GAAP EPS of $0.39 and a revenue of $5.53 billion, outperforming Wall Street estimates by $0.02 and $430 million, respectively. Revenue for the second quarter increased 25.4% on a year-over-year basis. 

In the second quarter of 2022, Cathie Wood increased her stake in Block, Inc. (NYSE:SQ) by 3%, holding 10.72 million shares worth $714 million, representing 4.72% of the total 13F securities. 

According to Insider Monkey’s first quarter database, 64 hedge funds were bullish on Block, Inc. (NYSE:SQ), compared to 70 funds in the prior quarter. Philippe Laffont’s Coatue Management held a prominent stake in the company, comprising 9.8 million shares worth $678.4 million. 

Here is what Baron Fintech Fund has to say about Block, Inc. (NYSE:SQ) in its Q2 2022 investor letter:

“Block, Inc. provides point-of-sale technology to small businesses and operates the Cash App ecosystem of financial services for individuals. Shares fell due to mixed quarterly results with more modest growth in the Seller business offsetting strength in Cash App. While integration of recently acquired Afterpay is progressing well and credit metrics remain healthy, the buy-now-pay-later business slowed due to greater competitive intensity. We continue to own the stock due to Block’s long runway for growth, sustainable competitive advantages, and unique corporate culture.”

4. Roku, Inc. (NASDAQ:ROKU)

ARK Invest’s Stake Value: $764,852,333

Number of Hedge Fund Holders: 27

Roku, Inc. (NASDAQ:ROKU) operates a TV streaming platform. It is one of the top picks from the Cathie Wood stock portfolio. Wood has consistently maintained a stake in Roku, Inc. (NASDAQ:ROKU) from the second quarter of 2019. In Q2 2023, ARK Invest held approximately 12 million shares of the company valued at $764.85 million. 

On July 27, Roku, Inc. (NASDAQ:ROKU) reported a Q2 GAAP EPS of -$0.76 and a revenue of $847 million, outperforming Wall Street consensus by $0.51 and $72.47 million, respectively. The number of active accounts rose to 73.5 million, marking a net growth of 1.9 million users compared to the first quarter of 2023.

According to Insider Monkey’s first quarter database, 27 hedge funds were bullish on Roku, Inc. (NASDAQ:ROKU), compared to 30 funds in the prior quarter. D E Shaw is a prominent stakeholder of the company, with 3.35 million shares worth approximately $221 million. 

Here is what Saga Partners has to say about Roku, Inc. (NASDAQ:ROKU) in its Q2 2022 investor letter:

“The Portfolio first bought Roku in Q3’20. It was a company we followed closely given our investment in The Trade Desk and its importance in connected television (CTV). Roku continued to impressively grow its CTV market share and it took some extra work to understand the underlying dynamics causing Roku’s success. I think there is some misunderstanding surrounding the connected television landscape. Since I haven’t written extensively on the topic in past letters, I thought it would be helpful to provide a little more background on the underlying dynamics of the space below…” (Click here to see the full text)

3. UiPath Inc. (NYSE:PATH)

ARK Invest’s Stake Value: $800,012,633

Number of Hedge Fund Holders: 36

UiPath Inc. (NYSE:PATH) offers a comprehensive automation platform for robotic process automation (RPA) solutions. It provides a suite of software tools to create, control, execute, involve, assess, and regulate automation processes within an organization. UiPath Inc. (NYSE:PATH) is one of the top picks from the Cathie Wood stock portfolio. Wood owned an $800 million stake in the company during Q2 2023. 

On May 24, UiPath Inc. (NYSE:PATH) reported a Q1 non-GAAP EPS of $0.11 and a revenue of $289.59 million, outperforming Wall Street estimates by $0.09 and $18.35 million, respectively. 

According to Insider Monkey’s Q1 database, UiPath Inc. (NYSE:PATH) was found in 36 hedge fund portfolios, with combined stakes worth $1.58 billion. Alkeon Capital Management is a significant position holder in the company, with 16.5 million shares worth nearly $291 million. 

ClearBridge Investments made the following comment about UiPath Inc. (NYSE:PATH) in its Q3 2022 investor letter:

“Over the last three months, we similarly exited UiPath Inc. (NYSE:PATH) due to a change to our original thesis as we believe a new go-to-market strategy for its automation software could impact near-term execution. While we think process automation is a growing market, in a slowing macro environment single solutions may be more vulnerable than the platform solutions of software providers who can bundle products to meet a wide range of needs. In addition, the company has a material component of sales sourced in Europe where the economy is more vulnerable.”

2. Coinbase Global, Inc. (NASDAQ:COIN)

ARK Invest’s Stake Value: $867,320,593

Number of Hedge Fund Holders: 28

Coinbase Global, Inc. (NASDAQ:COIN) specializes in financial technology and infrastructure to support the crypto economy. It is one of the top stock picks from the Cathie Wood portfolio. In Q2 2023, Cathie Wood increased her stake in Coinbase Global, Inc. (NASDAQ:COIN) by 3%, holding 12.1 million shares worth $867.3 million. According to Insider Monkey’s first quarter database, a total of 28 hedge funds were long Coinbase Global, Inc. (NASDAQ:COIN), compared to 27 funds in the earlier quarter. 

On August 3, Coinbase Global, Inc. (NASDAQ:COIN) reported a Q2 GAAP EPS of -$0.42 and a revenue of $707.9 million, outperforming Wall Street estimates by $0.36 and $70.12 million, respectively. 

Here is what Hayden Capital has to say about Coinbase Global, Inc. (NASDAQ:COIN) in its Q2 2022 investor letter:

“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)

1. Tesla, Inc. (NASDAQ:TSLA)

ARK Invest’s Stake Value: $1,267,914,698

Number of Hedge Fund Holders: 82

Tesla, Inc. (NASDAQ:TSLA) is the largest holding in the Cathie Wood stock portfolio. Wood is a Tesla bull, and she has owned the stock consistently since the first quarter of 2018. In Q2 2023, Cathie Wood’s Tesla, Inc. (NASDAQ:TSLA) stake consisted of 4.84 million shares worth $1.26 billion. 

Data from the China Passenger Car Association revealed that Tesla, Inc. (NASDAQ:TSLA) sold 64,285 electric vehicles manufactured in China in July. Although this electric vehicle count displayed a 128% increase from the same period last year, during which the Shanghai Gigafactory underwent a few weeks of upgrades, the production volume experienced a decline of 31% compared to June and marked the lowest production so far in 2023.

According to Insider Monkey’s first quarter database, 82 hedge funds were bullish on Tesla, Inc. (NASDAQ:TSLA), compared to 91 funds in the earlier quarter. D E Shaw is a significant position holder in the company, with 6.24 million shares worth $1.3 billion. 

Baron Opportunity Fund had this to say about Tesla, Inc. (NASDAQ:TSLA) in the first quarter of 2023:

“Tesla, Inc. (NASDAQ:TSLA) designs, manufactures, and sells EVs, related software and components, and solar and energy storage products. Following a sharp decline at the end of 2022, Tesla’s stock rebounded in the first quarter of 2023 on investor expectations that Tesla will continue to grow vehicle deliveries and maintain solid gross and operating margins despite a potential recession, competition in China, and vehicle price reductions. We wrote a long piece on Tesla last quarter and refer readers back to it, because for long-term investors not much has changed over the last three months. Tesla did hold its first Investor Day in March, and several Baron analysts and portfolio managers attended. We toured the Austin Gigafactory, drove in a Cybertruck, boarded a Semi truck, and spoke with a wide swath of Tesla senior managers. During the formal presentation, Tesla highlighted, among other things: (1) its broad and deep bench of executive talent supporting CEO Elon Musk; (2) its “Master Plan 3–Sustainable Energy for All of Earth,” which featured EVs, renewable power from solar and wind, and stationary electric storage; (3) its vehicle assembly innovations, including massive casted parts (building Model Y bodies with single front and rear castings, replacing a substantial number of parts and fastening steps), a stainless steel exoskeleton (for Cybertruck), and its next-generation highly efficient “unboxed process” for its next-gen $25,000 vehicle; (4) a future permanent[1]magnet electric motor that will not require any rare earths; and (5) the massive untapped market opportunity for commercial stationary electric storage, branded Megapack, as the world steadily shifts to renewable energy. As long-term shareholders, we have witnessed Tesla exploit its innovative Model 3/Y now-global mass-market platform to increase vehicle deliveries from barely a standing start to over 1.3 million units, while achieving industry-leading margins and reinforcing its iron-clad balance sheet to almost $23 billion in cash (and effectively no recourse debt). We expect Tesla’s next-generation EV and Megapack products to have a similar impact on company results.”

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