In this article, we will take a look at 15 stocks in Cathie Wood’s stock portfolio.
Cathie Wood is one of Wall Street’s most contentious figures. She founded ARK Investment Management around ten years ago and has over three decades of experience in the financial sector, including a notable spell as chief investment officer of AllianceBernstein Holding LP’s global thematic strategies unit. An 87.4% return in the fund, driven by a 1300% growth in Grayscale Bitcoin Trust, made it one of the fund’s best years since its debut in 2017. This performance came about at a time when Bitcoin’s price had reached a record high of $20,000.
Cathie Wood’s investing strategy is pretty straightforward: her ARK ETFs invest in developing high-tech firms in artificial intelligence, blockchain, medicinal technology, and robotics. Wood believes these firms can transform sectors, but their volatility causes significant fluctuations in ARK’s valuations. Although supporters of Wood hail her as a tech visionary, her detractors call her a run-of-the-mill fund manager. Additionally, despite achieving a 153% return in 2020, her long-term performance has raised questions regarding the viability of her high-risk, high-reward investment style. With $6,269 million under management, the ARK Innovation ETF has returned an annualized 14.24% over the last five years and a 12.16% year-to-date. The Nasdaq Composite, on the other hand, has an average return of 106.84% over five years.
Big Ideas 2025
Following recent changes in technology markets, Cathie Wood and her ARK research team released the yearly blockbuster report “Big Ideas 2025.” Wood seems optimistic about the future of AI computing power and AI agents. She added that from the dawn of artificial intelligence in 2018, computer performance has multiplied 40 times, and by 2023, it will have exceeded 48 times. Computing performance is predicted to hit a new high by the end of this century, mainly due to the rapid growth of AI. Specifically, Cathie Wood believes that AI agents are the central subject of future development, with the potential to accelerate the adoption of digital applications and spark unfathomable changes in human-computer interaction. Narrowing it down to specific industries, these agents will also press for an increase in the use of digital wallets in e-commerce. According to ARK research, digital wallets powered by AI purchasing agents are gaining market share from traditional payment methods such as credit and debit cards, with digital wallets anticipated to account for 72% of all e-commerce transactions by 2030.
Cathie Wood of ARK Investment Management
Our Methodology
For this article, we scanned ARK Investment Management’s Q3 portfolio and chose its top 15 stock picks. The stocks are ranked in ascending order of the fund’s stakes in them.
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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
15. Meta Platforms, Inc. (NASDAQ:META)
ARK Investment Management’s Q3 Stake Value: $227.7 million
Number of Hedge Fund Holders: 235
Meta Platforms, Inc. (NASDAQ:META) is a leading technology company best known for its flagship platforms Facebook, Instagram, and WhatsApp, as well as its novel advances in virtual reality (VR) and augmented reality (AR). AI-powered improvements to Meta’s algorithms and user experience continue to generate ad revenue for the social media giant. Every month, more than 500 million people use the company’s platforms, demonstrating the widespread adoption of its Llama AI approach.
On January 30, UBS analyst Stephen Ju reaffirmed his Buy rating on Meta Platforms Inc. (NASDAQ:META) and increased the company’s share price target from $736 to $786. Ju’s optimism comes from his belief that, based on Meta’s most recent guidance and budget announcements, the company will outperform revenue and earnings expectations in 2025. Although most analysts predict that Meta Platforms, Inc. (NASDAQ:META) will increase its ad revenue by about $21.4 billion in 2025, he sees a potential for a higher number, especially as the company gets past the compute capacity issues that hampered growth back in 2024.
14. DraftKings Inc. (NASDAQ:DKNG)
ARK Investment Management’s Q3 Stake Value: $236.1 million
Number of Hedge Fund Holders: 54
With operations both domestically and abroad, DraftKings Inc. (NASDAQ:DKNG) is an American digital sports entertainment and gaming company that provides media content, daily fantasy sports, online sports betting and casino services, as well as a range of consumer goods.
DraftKings Inc. (NASDAQ:DKNG) reported revenue of $1.095 billion for the third quarter of 2024, depicting a 39% increase over the $790 million reported in Q3 2023. Additionally, the company reported a massive increase in Monthly Unique Payers (MUPs), which jumped 55% year-over-year to 3.6 million.
Susquehanna analysts reduced their price target for DraftKings Inc. (NASDAQ:DKNG) shares from $56 to $54 while maintaining a Positive rating on the company’s shares. In contrast to the initial estimates of $1.525 billion and $168 million, respectively, the firm’s analysts now expect DraftKings to report fourth-quarter revenue of $1.4 billion and EBITDA of $81 million. This follows the company reported a revenue increase of 40% over the previous year, reaching $4.6 billion.