Navigating the markets can be a tough task these days. According to the stock market capitalization to gross domestic product (GDP) ratio, today’s U.S. stock market is 100% overvalued. But even though you can disagree with the extent, most will agree the U.S. stock market is far from cheap at the moment. In these circumstances, the best thing you can do is to track investment gurus. That is why we are bringing you a list of Cathie Wood stocks today, which you can use to spruce up your portfolio.
Cathie Wood is a legendary investor and the founder, CEO, and CIO of Ark Invest, one of the most prominent investment management firms. Although her career dates back to 1981, Cathie Wood acquired a cult-like following during one of the most tumultuous years in Wall Street history.
Her flagship exchange-traded fund, the $24.5 billion ARK Innovation ETF (NYSEARCA:ARKK), jumped 150% last year, primarily because of Tesla’s (NASDAQ:TSLA) 730% gain.
One of the most interesting aspects of Cathie Wood’s approach is her conviction when allocating capital. While some investors might balk at certain securities, Wood has the ability to look into the abyss and not blink.
Considering all these aspects, it pays to keep track of the latest Cathie Wood investments and mine them for ideas for your own portfolio. These seven Cathie Wood stocks have been huge winners and have growth-oriented profiles.
So, without further ado, let’s take a deep dive on stocks this ace investor is particularly fond of:
- PayPal Holdings (NASDAQ:PYPL)
- Palantir Technologies (NYSE:PLTR)
- Grayscale Bitcoin Trust (OTCMKTS:GBTC)
- Roku (NASDAQ:ROKU)
- Crispr Therapeutics (NASDAQ:CRSP)
- Zoom Video Communications (NASDAQ:ZM)
- JD.com (NASDAQ:JD)
Cathie Wood Stocks: PayPal Holdings (PYPL)
Ark Invest had made a name for itself by investing in high-risk stocks, but numerous companies in the portfolio are actually safe, mature investments.
PYPL stock is far from a risky investment; shares have a five-year return of 680%, hardly pedestrian growth. And according to Seeking Alpha, its five-year average revenue growth is 18.4%.
PayPal is the face of our digital payment revolution. But growth exploded last year during the pandemic, and investors benefitted handsomely as a result. PayPal added a record 72.7 million active accounts in 2020. Earnings growth was a staggering 31% in 2020.
More recently, in the second quarter of 2021, PayPal’s net payment volume totaled $311 billion, representing 40% year-on-year growth. It marked yet another stellar quarter for the company, which has grown impressively during the pandemic.
Palantir (PLTR)
One of the most-talked-about stocks over the last year, Palantir is equal parts controversial and exciting. A big data analytics firm closely associated with the defense establishment, Palantir has received a fair share of criticism from members of Congress regarding contracts with the U.S. Immigration and Customs Enforcement (ICE), among other agencies.
However, that is one side to the story. Regardless of where your politics are on the matter, you have to acknowledge that Palantir has done an incredible job of inking deals that will lead to strong recurring revenues. Considering the importance of these revenue streams for a burgeoning tech enterprise, I always rate PLTR stock highly.
Its latest earnings figures confirm the company is moving in the right direction. The only negative I can point out is the stock’s valuation at the moment. Since debuting last September, shares have skyrocketed and are up over 14% in the last month alone. I would wait for shares to drop a bit before buying in.
Cathie Wood Stocks: Grayscale Bitcoin Trust (GBTC)
If you peruse Ark’s portfolio, you will find several companies that only the most risk-tolerant investors will purchase. However, that doesn’t make them bad investments.
Take Grayscale Bitcoin Trust as an example. If you want leveraged exposure to Bitcoin (CCC:BTC-USD) and are still figuring out how best to do it, GBTC is an interesting option.
The quick adoption of crypto will lead to a rise in investment vehicles that will allow you to own a piece of the cryptocurrency in much the same way a gold enthusiast loves iShares Gold Trust (NYSEARCA:IAU). Grayscale has also developed ETFs that can give equity investors exposure to cryptos like Ethereum (CCC:ETH-USD), Litecoin (CCC:LTC-USD), and a few others.
But the institutional interest in Bitcoin and these other coins is not comparable.
PayPal and Square (NYSE:SQ) now allows users to play in the crypto space. Meanwhile, AT&T (NYSE:T), Starbucks (NASDAQ:SBUX), Microsoft (NASDAQ:MSFT) and Shopify (NYSE:SHOP) all accept crypto as a form of payment. The list of partnerships and announcements is exhaustive.
Hence, until a Bitcoin ETF surfaces, GBTC remains a great deal from a risk-to-reward perspective.
Roku (ROKU)
Roku’s streaming players and television-related audio devices did very well during the pandemic. The company flexed its muscles and recorded quarter after quarter of earnings beats.
More recently, though, investor sentiment is souring as the economy reopens. Stay-at-home stocks are slowly giving away their gains as recovery plays attract attention.
Also, Roku and Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) are at loggerheads with each other over licensing rates to use Roku’s platform after the company removed YouTube TV from the Roku channel store on April 30. If there is one thing most investors value, it’s stability. Understandably, this has led to the stock losing a bit of sheen. Shares are basically flat over a three-month period.
But this is a stable enterprise. In Q2, total net revenue increased by a very healthy 81% year over year in the quarter to $645 million. There are two areas of concern worth mentioning, though. Streaming hours fell by 1 billion from the first quarter of 2021. The digital media company attributed the fall to lifting Covid-19 restrictions and people returning to outdoor activity.
In its shareholder letter, Roku also highlighted supply chain issues due to the prevailing conditions. These are, however, all pandemic-related issues. Considering its success in the last few years, it should do just fine when the dust settles.
Cathie Wood Stocks: Crispr Therapeutics (CRSP)
Crispr Therapeutics is an emerging biotech known for its CRISPR-Cas9 technology platform, which focuses on gene-editing technology. The research can wipe out rare hereditary diseases, which will be a monumental breakthrough in scientific progress.
Now, remember that this is a company at the start of its journey. So, Crispr still trades largely on potential. But even if one of its products is approved, sales growth will be astronomical.
Investing in startup companies is a very risky business. However, they can become multi-baggers if they become successful. Take Tesla (NASDAQ:TSLA) as an example. Sure, investors had some bad years, but they are reaping the benefits now. Hence, you should have the long game in mind when pouring capital into CRSP.
But when an ace investor like Cathie Wood backs a stock, you better believe it has something in the tank.
Zoom Video Communications (ZM)
Overall, the pandemic ravaged the American economy. But for some companies, it was a massive tailwind. One such enterprise was Zoom, which became the go-to video conferencing software during the crisis. Zoom became the preeminent company in the space, beating out Cisco (NASDAQ:CSCO) as companies shifted their meetings online.
For the 12 months ended Jan. 31, Zoom’s revenue finished at $2.65 billion, a substantial uptick year on year from $623 million during the last fiscal year. Net profit came in at $671 million, up from $22 million in fiscal 2020.
Now for many, Zoom is primarily a pandemic play. With things getting back to normal, people will be taking flights, and conferences will take place one on one. That has led to muted investor sentiment for Zoom. Shares are down 21% in the last month, despite the company reporting another stellar quarter.
Zoom Video reported a fiscal second-quarter net income of $316.9 million, or $1.04 a share, compared with $185.6 million, or 63 cents a share, last year. Revenues rose 54%, finishing at $1.02 billion, handily topping analyst estimates.
However, Chief Financial Officer Kelly Steckelberg said the growth will peter out, “especially when compared to the unprecedented year-over-year comps.”
Still, Cathie Wood has doubled down on the investment, purchasing $56 million worth of ZM stock after a mixed second quarter and outlook.
Cathie Wood Stocks: JD.com (JD)
China’s regulatory crackdown has wiped billions off tech stocks. The casualties include some of China’s leading tech companies, such as Tencent (OTCMKTS:TCEHY), Didi (NYSE:DIDI), and TAL Education (NYSE:TAL).
However, the absence of significant new initiatives in recent days is helping change the mood. JD.com’s quarterly sales beating estimates helped change the conversation. And Wood’s Ark Investment Management buying American depository receipts of the company certainly helped perk up investor sentiment as well.
JD.Com offers online retail, online marketplace and marketing services in China and is the main competitor for Alibaba (NYSE:BABA). It is China’s biggest online retailer, its biggest overall retailer, and its largest Internet company by revenue. If you are even mildly interested in the Chinese investing space, you should check out this stock.
On the publication date, Faizan Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Faizan Farooque is a contributing author for InvestorPlace.com and numerous other financial sites. Faizan has several years of experience in analyzing the stock market and was a former data journalist at S&P Global Market Intelligence. His passion is to help the average investor make more informed decisions regarding their portfolio.