In this article, we discuss Cathie Wood’s 10 favorite stock picks for the rest of 2022. If you want to see more stocks in this selection, click Cathie Wood’s 5 Favorite Stock Picks for the Rest of 2022.
Cathie Wood, the chief of ARK Investment Management, has been making headlines recently as her hedge fund suffered tremendous losses amid the growth selloff. As of July 18, ARK’s flagship Innovation ETF has declined over 55% year to date. Despite the massive selloff in growth equities, Cathie Wood remains adamant on her disruptive innovation path, and aims to invest in companies with long-term growth potential.
Investors poured $1.5 billion into Cathie Wood’s flagship ARK fund in the first half of 2022, despite the poor performance of her growth portfolio. Wood reiterated that her clients support her vision, with an investment horizon of 5 to 10 years. She believes that disruptive innovation generates positive returns when the world faces a crisis. Her portfolio is focused on companies that specialize in improvements and advancements in scientific research, DNA technologies, industrial innovation, automation, manufacturing, and fintech.
Securities filings for Q2 2022 reveal that Cathie Wood’s $17 billion hedge fund made purchases in 9 new stocks, bought additional stakes in 102 equities, sold off 12 stocks, and reduced holdings in 223 companies. Some of the most notable stocks in Cathie Wood’s portfolio include Tesla, Inc. (NASDAQ:TSLA), Zoom Video Communications, Inc. (NASDAQ:ZM), and Block, Inc. (NYSE:SQ).
Our Methodology
We used the Q2 2022 portfolio of Cathie Wood’s ARK Investment Management for this analysis, selecting the hedge fund’s new stock picks and the equities where the fund increased its hold significantly in the June quarter.
Cathie Wood of ARK Investment Management
Cathie Wood’s Favorite Stock Picks for the Rest of 2022
10. Matterport, Inc. (NASDAQ:MTTR)
Number of Hedge Fund Holders: 12
Matterport, Inc. (NASDAQ:MTTR) was founded in 2011 and is headquartered in Sunnyvale, California. It is a spatial data company that operates a 3D data platform to design and understand spaces. On June 27, it was announced that Matterport, Inc. (NASDAQ:MTTR) will enter the Russell 2000 Index at the end of 2022. In the second quarter of 2022, Cathie Wood’s hedge fund boosted its Matterport, Inc. (NASDAQ:MTTR) stake by 95%, holding over 1 million shares worth $5.6 million.
On July 18, Piper Sandler analyst Brent Bracelin reiterated an Overweight rating on Matterport, Inc. (NASDAQ:MTTR) and lowered the price target on the stock to $5 from $7. As per the analyst, software subscription models with over 85% recurring revenue streams, healthy gross margins, and secular tailwinds given cloud and digital might be better positioned in the current environment than cyclicals.
According to Insider Monkey’s data, 12 hedge funds were bullish on Matterport, Inc. (NASDAQ:MTTR) at the end of Q1 2022, compared to 19 funds in the prior quarter. Chase Coleman’s Tiger Global Management held the biggest position in the company, with 3.60 million shares worth $29.2 million.
Like Tesla, Inc. (NASDAQ:TSLA), Zoom Video Communications, Inc. (NASDAQ:ZM), and Block, Inc. (NYSE:SQ), Matterport, Inc. (NASDAQ:MTTR) is one of the favorite stock picks of Cathie Wood.
Here is what Miller Opportunity Equity has to say about Matterport, Inc. (NASDAQ:MTTR) in its Q4 2021 investor letter:
“Matterport Inc. (MTTR) continued to be a strong contributor during the quarter after Matterport’s ability to contribute to the building of the metaverse was brought to light. The company reported 3Q results that missed consensus due to unexpected supply constraints and labor shortage in its capture services. The company reported total sales of $27.7M below consensus of $29.1M but with gross profit beating coming in at $15.2M versus $15.1M expected leading to an EPS loss of -$0.06 slightly better than consensus of -$0.07. The company lowered full-year revenue guidance to $107-110M down from $120-126M previously while also lowering FY22 topline guidance to 50% growth from 65% at the time of the PIPE transaction due to continuing supply constraints and labor shortage.”
9. REE Automotive Ltd. (NASDAQ:REE)
Number of Hedge Fund Holders: 12
REE Automotive Ltd. (NASDAQ:REE) is headquartered in Herzliya, Israel, operating as an e-mobility business. Securities filings for the second quarter of 2022 reveal that Cathie Wood’s ARK Investment Management boosted its REE Automotive Ltd. (NASDAQ:REE) stake by 83%. The ARK portfolio had over 1 million REE Automotive Ltd. (NASDAQ:REE) shares worth about $1.7 million at the end of June.
DA Davidson analyst Michael Shlisky on May 18 maintained a Buy recommendation on REE Automotive Ltd. (NASDAQ:REE) but lowered the price target on the shares to $10 from $13. According to the analyst, REE Automotive Ltd. (NASDAQ:REE)’s launch and financials were on-track with initial SPAC-deck forecasts, and it is one of the few EV de-SPACs who have prospered, the analyst told investors. The 80% drop in the stock price suggests that investors predict significant dilution from capital raises, and the stock seems to be an “EV bargain”, the analyst added.
As per Insider Monkey’s Q1 data, 12 hedge funds were bullish on REE Automotive Ltd. (NASDAQ:REE), up from 10 funds in the earlier quarter. Christian Leone’s Luxor Capital Group is the leading stakeholder of the company, with 1.5 million shares worth $2.8 million.
8. Allot Ltd. (NASDAQ:ALLT)
Number of Hedge Fund Holders: 18
Allot Ltd. (NASDAQ:ALLT) is an Israel-based company that specializes in network intelligence and digital security solutions in Europe, Asia, Oceania, the Middle East, Africa, and the Americas. Cathie Wood’s ARK Investment Management strengthened its hold on Allot Ltd. (NASDAQ:ALLT) by 42% in the second quarter of 2022, with 357,287 shares worth $1.8 million.
On May 17, Lake Street analyst Eric Martinuzzi downgraded Allot Ltd. (NASDAQ:ALLT) to Hold from Buy and slashed the price target to $5 from $13, after Allot Ltd. (NASDAQ:ALLT) cut its 2022 revenue guidance. His present 2022 model expects a 6% revenue decline, added the analyst. He believes SECAAS traction will eventually return Allot Ltd. (NASDAQ:ALLT) to growth, but added that the company’s short-term challenges make for “a less-appealing investment thesis”.
According to Insider Monkey’s data, 18 hedge funds held long positions in Allot Ltd. (NASDAQ:ALLT) at the conclusion of the first quarter of 2022, up from 14 funds in the previous quarter. Cynthia Paul’s Lynrock Lake is the largest position holder in the company, with roughly 8 million shares worth $64.5 million.
7. Nurix Therapeutics, Inc. (NASDAQ:NRIX)
Number of Hedge Fund Holders: 20
Nurix Therapeutics, Inc. (NASDAQ:NRIX) is a California-based biopharmaceutical company that develops small molecule therapies for treating cancer and immune disorders. In the first week of July, the company managed to raise $90 million via registered direct offering. Nurix Therapeutics, Inc. (NASDAQ:NRIX) said that along with existing cash, this amount will be enough to finance its operating activities into the second half of 2024. Cathie Wood’s ARK Investment Management boosted its Nurix Therapeutics, Inc. (NASDAQ:NRIX) stake by 99%, holding 778,725 shares worth $7.85 million.
H.C. Wainwright analyst Robert Burns maintained a Buy rating on Nurix Therapeutics, Inc. (NASDAQ:NRIX) but lowered the firm’s price target on the stock to $54 from $60 after the Q2 results.
Among the hedge funds tracked by Insider Monkey, 20 funds reported owning stakes in Nurix Therapeutics, Inc. (NASDAQ:NRIX) at the end of Q1 2022, down from 25 funds in the prior quarter. Jeremy Green’s Redmile Group is the leading position holder in the company, with over 3 million shares worth $42.2 million.
6. Global-e Online Ltd. (NASDAQ:GLBE)
Number of Hedge Fund Holders: 26
Global-e Online Ltd. (NASDAQ:GLBE) was incorporated in 2013 and is headquartered in Petah Tikva, Israel. The company offers a platform to allow B2C cross-border e-commerce in Israel, the United Kingdom, the United States, and internationally. Securities filings for Q2 2022 reveal that Cathie Wood’s hedge fund strengthened its hold on the company by 45%. The ARK portfolio had 812,173 shares of Global-e Online Ltd. (NASDAQ:GLBE) worth $15.65 million, representing 0.09% of the total 13F portfolio.
On July 14, Goldman Sachs analyst Will Nance raised the price target on Global-e Online Ltd. (NASDAQ:GLBE) to $31 from $28 and reaffirmed a Buy rating on the shares. The analyst believes “sentiment is highly mixed” heading into the firm’s Q2 results and that a reiteration of revenue outlook apart from the impact from Borderfree “could be well received given the overlapping headwinds the company is facing”. Similarly, on July 18, Piper Sandler analyst Brent Bracelin maintained an Overweight rating on the shares but lowered the firm’s price target on Global-e Online Ltd. (NASDAQ:GLBE) to $28 from $30.
According to Insider Monkey’s database, 26 hedge funds were bullish on Global-e Online Ltd. (NASDAQ:GLBE) at the end of June, compared to 28 funds in the earlier quarter. Colin Moran’s Abdiel Capital Advisors is the leading shareholder of the company, with 10 million shares worth $337.8 million.
In addition to Tesla, Inc. (NASDAQ:TSLA), Zoom Video Communications, Inc. (NASDAQ:ZM), and Block, Inc. (NYSE:SQ), elite hedge funds are monitoring Global-e Online Ltd. (NASDAQ:GLBE).
Here is what Artisan Mid Cap Fund has to say about Global-e Online Ltd. (NASDAQ:GLBE) in its Q4 2021 investor letter:
“We added to several positions during the quarter including Global-e online. Global-e online is a global e-commerce service platform enabling cross-border transactions across 200+ countries. It provides three critical elements: website localization, payments and logistics. For background, ~30% of a global brand’s online traffic is from international shoppers, though the portion of its international sales is no more than 5%-10% as brands struggle to overcome numerous cross-border challenges—different languages, currencies, payment methods, duties/taxes and shipping providers. There is no one-size-fits-all solution as each market is unique; hence, merchants of all sizes find a do-it-yourself cross-border strategy to be complex, costly and difficult to maintain. In our view, the capability of Global-e online’s platform to remove these frictions was recently validated by its strategic partnership with e-commerce platform giant Shopify, which also made an equity investment in the company. With strong current performance and the potential for accelerated growth once Global-e completes its technological integration with Shopify’s platform, we added to our GardenSM position.”
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Disclosure: None. Cathie Wood’s 10 Favorite Stock Picks for the Rest of 2022 is originally published on Insider Monkey.
