In this article, we discuss the top 5 car stock picks of Cathie Wood. If you want to read our detailed analysis of Wood’s history, investment philosophy, and hedge fund performance, go directly to Cathie Wood’s Thoughts on Automobile Industry and Her Top 10 Car Stock Picks.
5. Xometry, Inc. (NASDAQ:XMTR)
Percentage of ARK Investment Management’s 13F Portfolio: 0.03%
ARK Investment Management’s Stake Value: $13,895,000
Number of Hedge Fund Holders: 18
Xometry, Inc. (NASDAQ:XMTR) is among the newest car stocks in Cathie Wood’s portfolio. In Q3 2021, Wood initiated her position in Xometry, Inc. (NASDAQ:XMTR) and bought 240,947 shares of the stock for a total value of nearly $14 million.
The company manufactures on-demand automotive parts for some of the biggest car companies in the world like BMW. As an on-demand industrial parts marketplace, Xometry, Inc. (NASDAQ:XMTR) also serves a variety of industries including robotics, aerospace, consumer goods, and electronics.
In its third-quarter financial release, Xometry, Inc. (NASDAQ:XMTR) stated that active buyers in the marketplace increased by 61% to 26,187, up from 16,266 a year ago. Xometry, Inc. (NASDAQ:XMTR) stock rise about 11% in December. To grow its business, the industrial marketplace acquired digital marketing solutions vendor Thomas for $300 million at the time.
There were 18 hedge funds in Insider Monkey’s database that held stakes in the company at the end of the third quarter, compared to 28 funds in the previous quarter.
4. Baidu, Inc. (NASDAQ:BIDU)
Percentage of ARK Investment Management’s 13F Portfolio: 0.08%
ARK Investment Management’s Stake Value: $36,117,000
Number of Hedge Fund Holders: 44
Following its comeback from a year-long collapse, market analysts are becoming more upbeat on Baidu, Inc. (NASDAQ:BIDU), a Chinese internet search engine giant. On January 12, UBS analyst Wei Xiong increased his price target on Baidu, Inc. (NASDAQ:BIDU) while maintaining a Buy rating on the stock. Xiong claims that the company is making significant progress on its auto and cloud programs, which are in line with the government’s innovation plans.
Baidu, Inc. (NASDAQ:BIDU) CEO Robin Li recently announced that Jidu Auto, a joint venture with Zhejiang Geely Holding Group, will launch mass production of its first electric vehicle with Level-2 autonomous driving capabilities in 2023.
At the end of the third quarter of 2021, 44 hedge funds in the database of Insider Monkey held stakes worth $2 billion in Baidu, Inc. (NASDAQ:BIDU), compared to 59 the preceding quarter worth $3.47 billion.
In its Q3 2021 investor letter, Ariel Investments mentioned Baidu, Inc. (NASDAQ:BIDU) and discussed its stance on the firm. Here is what the fund said:
“When we have such a high level of conviction for a company it is not uncommon for us to own it in size across our portfolios. Such is the case with technology giant Baidu, whose leading search engine has been dubbed the “Google of China.” This quarter shares sold off in sympathy with the Chinese internet sector as investors were rattled by the government’s sweeping regulatory crackdown intended to promote “common prosperity” by easing wealth inequality. While we recognize the greater political risk of investing in emerging markets such as China and incorporate an appropriately higher risk premium in the discount rate in our valuation models, we believe Baidu’s business strategy is aligned with national policies and priorities and is therefore not adversely impacted unlike some other players in the internet sector who are in the eye of the storm.
Indeed, the Chinese government recognizes Baidu’s large, upfront investments in many next-generation artificial intelligence (AI) technologies and hails it as a national champion. For example, the company’s Advanced Driving Support System (ADAS), Apollo, has twice as much data on miles driven than any other initiative in the world, giving Baidu (and China) a large lead in the global AI arms race. In addition, Baidu’s cloud offering touts highly differentiated Platform as a Service (PaaS) features and capabilities for a demanding enterprise customer base. While these initiatives are a temporary drag on margins and require long-term execution, their success will bolster China’s “dual circulation” strategy aimed at spurring domestic demand, innovation, and self-reliance.” (Click here to see the full text)
3. Teradyne, Inc. (NYSE:TER)
Percentage of ARK Investment Management’s 13F Portfolio: 0.14%
ARK Investment Management’s Stake Value: $61,335,000
Number of Hedge Fund Holders: 42
Teradyne, Inc. (NYSE:TER) assists automakers in delivering cost-effective and high-quality automotive devices by providing automation test services. Teradyne, Inc. (NYSE:TER) verifies that automakers and suppliers use high-quality semiconductors, increase car safety features, and meet rigorous CO2 standards.
Cathie Wood has held Teradyne, Inc. (NYSE:TER) stock since the fourth quarter of 2017 and now owns 561,829 shares worth approximately $61 million as of the end of the third quarter of 2021. New York-based investment advisory firm Alkeon Capital Management is the largest shareholder of Teradyne, Inc. (NYSE:TER) with 3.97 million shares worth $434 million.
Wood isn’t the only one who believes in Teradyne, Inc. (NYSE:TER), as Loop Capital analyst Scott Graham initiated a Buy rating on the stock on January 13 with a $202 price target.
2. TuSimple Holdings Inc. (NASDAQ:TSP)
Percentage of ARK Investment Management’s 13F Portfolio: 0.91%
ARK Investment Management’s Stake Value: $382,967,000
Number of Hedge Fund Holders: 12
TuSimple Holdings Inc. (NASDAQ:TSP) develops autonomous technology for commercial semi-trucks. The company’s driverless trucks operate completely autonomously without human intervention. As the California-based trucking company went public last year, TuSimple Holdings Inc. (NASDAQ:TSP) gained partnerships with various logistics companies including United Parcel Service, Inc. (NYSE:UPS), Ryder System, Inc. (NYSE:R), and DHL.
TuSimple Holdings Inc. (NASDAQ:TSP) increased its revenue by approximately three times from the previous year in the third quarter of 2021 to $1.8 million, owing to increased utilization of its own commercial and partner fleet.
Cathie Wood increased her stake in TuSimple Holdings Inc. (NASDAQ:TSP) by 60% during the third quarter of 2021, bringing her total holdings to over 10 million shares worth $383 million. Overall, 12 funds of the 867 elite funds tracked by Insider Monkey reported owning stakes in TuSimple Holdings Inc. (NASDAQ:TSP) at the end of September 2021.
1. Tesla, Inc. (NASDAQ:TSLA)
Percentage of ARK Investment Management’s 13F Portfolio: 7.36%
ARK Investment Management’s Stake Value: $3,064,923,000
Number of Hedge Fund Holders: 60
Tesla, Inc. (NASDAQ:TSLA) has the highest weightage in Cathie Wood’s portfolio as of the end of Q3 2021, accounting for 7.36% of ARK Investment Management’s total holdings. ARK Invest sold 87,756 shares of the EV stock for $90.5 million on January 14, extending its months-long profit booking spree. Known as a Tesla, Inc. (NASDAQ:TSLA) bull, Cathie Wood stated in September that she would sell the electric-vehicle maker’s stock if it reaches her five-year target of $3,000 by the end of 2022.
Tesla, Inc. (NASDAQ:TSLA) has the most productive auto factory in North America, which generated an average of 8,550 cars per week in its California plant last year, according to Bloomberg data. As a result, more investors expressed optimistic views on Tesla, Inc. (NASDAQ:TSLA). In January, Jefferies maintained its Buy rating on the EV stock while Piper Sandler kept its Overweight rating on the auto stock.
At the end of the third quarter of 2021, 60 hedge funds in Insider Monkey’s database held stakes in Tesla, Inc. (NASDAQ:TSLA) worth $10.6 billion, the same as the previous quarter with a stake of $9.3 billion.
In its Q4 2021 investor letter, investment management firm East 72 mentioned Tesla, Inc. (NASDAQ:TSLA) and discussed its stance on the firm. Here is what the fund said:
“However, our favourite short play of 2021, which added value in the past quarter (falling over 14%) was in the US ETF, ARK Innovation Fund (ARKK). ARKK is managed by ARK Investment Management (ARKIM) founded in 2014 by Cathie Wood, its (now) 66year old devout Christian portfolio manager. ARKIM focuses on investing in what it believes are the beneficiaries of disruption and innovation with a focus on AI, DNA sequencing, robotics, energy storage, and blockchain technology3. ARKIM’s viewpoints are interesting but in my opinion, potentially have a habit of falling foul of Bill Gates’ famous comment that “we always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten”. Moreover, this opinion is buttressed by ARKIM’s publication of various financial models to provide a backdrop for their extravagant Tesla valuations, which lack any kind of accounting credibility….ARKK’s biggest investment over this period has been Tesla, averaging around 10% of the fund. ARKK has been forced to sell Tesla shares, despite having a price target of US$3,000/share, mainly because TSLA has appreciated by around 40% since the fund peak in mid-February 2021; the residual 90% of the portfolio is cumulatively down around 44% since 18 February 2021 (see some examples on attaching table). Whatever our view of TSLA, it has been a shining beacon in a sea of detritus for ARKK.”
You can also take a peek at the 10 High Yield Dividend Kings for 2022 and Leon Cooperman’s Performance in 2021: 10 Best Stock Picks.
