We recently published a list of Ark Invest Stock Portfolio: Top 10 Stocks to Buy. In this article, we are going to take a look at where Coinbase Global, Inc. (NASDAQ:COIN) stands against other top stocks to buy from Ark Invest’s portfolio.
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.
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).
A shot of someone securely accepting crypto assets as payment, showcasing the company’s payment solutions.
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.”
Overall, COIN ranks 3rd on our list of top stocks to buy from Ark Invest’s portfolio. While we acknowledge the potential for COIN 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 COIN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.