Cathie Wood is an American investor who is the founder, CEO, and CIO of Florida-based ARK Investment Management. Cathie Wood has gained significant recognition in the investment community for her innovative and disruptive investment strategies focused on emerging technologies, including genomics, robotics, artificial intelligence, and blockchain. She is known for her active management style and high conviction investing, often taking bold positions in emerging companies with the potential for explosive growth.
"Our Strategy Tends To Do Pretty Well When Interest Rates Are Coming Down"
On March 21 Cathie Wood appeared in an interview on CNBC where she discussed the current market environment, the banking crisis, and her investment strategy moving forward. Wood thinks that the implications of the banking crisis on the overall economy are not completely being understood. However, she noted that her investment strategy "tends to do pretty well when interest rates are coming down and when the cyclicals are weak". Cathie Wood thinks that deflation is currently a big risk to the economy, and she has been pointing it out since Spring of 2022.
Cathie Wood went on to explain how her funds are positioned to weather the current environment. She noted that many of her companies have raised cash and cut costs, giving them several years of runway. Though Wood's strategy suffered major losses in 2022 as interest rates went up, she thinks that her firm is now in "very good shape and interest rates coming down is going to be another booster".
Overall, Wood believes that the recent valuation hit to her strategy is largely related to the Fed raising interest rates by 19-fold in less than a year, which she describes as an "earthquake." She sees severe challenges for cyclical stocks over the next 6 to 9 months, but believes her funds are well positioned to take advantage of lower interest rates.
Wood also discussed her bullish view on Block, Inc. (NYSE:SQ) and its Cash App. Cathie Wood noted that by reducing the cost of financial services and developing a closed-loop ecosystem, Block, Inc. (NYSE:SQ) could become "one of the big winners in the digital wallet space".
In addition to Block, Inc. (NYSE:SQ), some of Cathie Wood's top stock picks right now include Tesla, Inc. (NASDAQ:TSLA), Coinbase Global, Inc. (NASDAQ:COIN), and Roku, Inc. (NASDAQ:ROKU). Let's now discuss these stocks, among others, in detail below.
Cathie Wood's Stock Portfolio: 2023 Stock Picks
Cathie Wood of ARK Investment Management
Our Methodology
We scoured ARK Investment Management's actively managed ETFs and found the top holdings of each ETF by the weight it has in the fund, as of April 5. We narrowed down our selection to stocks that held the highest aggregate weight in ARK Investment Management's funds and then ranked them in ascending order of this metric.
Weight of Ark Investment Management's 13F Portfolio: 3.19%
DraftKings Inc. (NASDAQ:DKNG) is one of Cathie Wood's top stock picks right now. As of April 5, the stock has returned 72.67% to investors on a year-to-date basis, and makes up for 3.19% of Cathie Wood's portfolio.
DraftKings Inc. (NASDAQ:DKNG) announced earnings for the fourth quarter of fiscal 2022, on February 16, and outperformed EPS estimates by $0.05. The company generated a revenue of $855.13 million, up 80.79% year over year and ahead of Wall Street consensus by $55.89 million.
On March 22, Susquehanna analyst Joseph Stauff raised his price target on DraftKings Inc. (NASDAQ:DKNG) to $28 from $26 and reiterated a Positive rating on the shares.
Weight of Ark Investment Management's 13F Portfolio: 3.62%
On February 22, Teladoc Health, Inc (NYSE:TDOC) released earnings for the fiscal fourth quarter of 2022. The company generated a revenue of $637.71 million, up 15.06% year over year, and beat market estimates by $4.34 million.
On March 6, Canaccord analyst Richard Close updated his price target on Teladoc Health, Inc. (NYSE:TDOC) to $36 from $40 and maintained a Buy rating on the shares.
As of April 5, Teladoc Health, Inc (NYSE:TDOC) has gained 15% year to date. Cathie Wood is bullish on Teladoc Health, Inc (NYSE:TDOC) and the stock makes up for 3.62% of ARK Investment Management's portfolio right now.
Weight of Ark Investment Management's 13F Portfolio: 4.62%
As of April 5, Shopify Inc. (NYSE:SHOP) has gained 54.36% over the past 6 months. The stock makes up for 4.62% of Cathie Wood's portfolio and is placed eighth among her top stock picks for 2023.
On March 1, RBC Capital analyst Paul Treiber reiterated an Outperform rating and his $65 price target on Shopify Inc. (NYSE:SHOP).
Shopify Inc. (NYSE:SHOP) released earnings for the fiscal fourth quarter of 2022, on February 15. The company reported an EPS of $0.07 and outperformed EPS estimates by $0.09. The company generated a revenue of $1.73 billion, up 25.72% year over year, and beat revenue consensus by $84.28 million.
Baron Funds made the following comment about Shopify Inc. (NYSE:SHOP) in its Q4 2022 investor letter:
“Shopify Inc. (NYSE:SHOP) is a cloud-based software provider for multi-channel commerce. Shares rose 28.6% in the fourth quarter, reversing some of the declines from earlier in the year, as preliminary holiday results suggested a rebound in e-commerce activity. The company also reported solid third quarter financial results showing an increase in take rates, which points to a deeper adoption of its platform by merchants. We remain shareholders due to Shopify’s strong competitive positioning, innovative culture, and long runway for growth (it has less than 2% share of global commerce spending).”
Weight of Ark Investment Management's 13F Portfolio: 4.92%
This April, Truist analyst Andrew Jeffrey maintained a Buy rating and his $105 price target on Block, Inc. (NYSE:SQ).
On February 23, Block, Inc. (NYSE:SQ) announced earnings for the fourth quarter of fiscal 2022. The company reported an EPS of $0.22 and generated a revenue of $4.65 billion, up 14.03% year over year and ahead of Wall Street consensus by $56.71 million.
Block, Inc. (NYSE:SQ) is one of Cathie Wood's top stock picks for 2023. The stock has returned 10.76% to investors over the past 6 months, as of April 5, and currently makes up for 4.92% of ARK Investment Management's portfolio.
Some stocks that Cathie Wood has sizable positions in include Tesla, Inc. (NASDAQ:TSLA), Coinbase Global, Inc. (NASDAQ:COIN), Block, Inc. (NYSE:SQ), and Roku, Inc. (NASDAQ:ROKU).
Weight of Ark Investment Management's 13F Portfolio: 5.34%
On February 27, Zoom Video Communications, Inc. (NASDAQ:ZM) posted strong earnings for the fourth quarter of fiscal 2023. The company reported an EPS of $1.22 and outperformed EPS expectations by $0.40. The company generated a revenue of $1.12 billion, up 4.33% year over year, and outperformed Wall Street estimates by $17.08 million.
Zoom Video Communications, Inc. (NASDAQ:ZM) has an aggregate weight of 5.34% in Cathie Wood's funds. The stock is placed sixth among Cathie Wood's top stock holdings and has gained 10.47% on a year-to-date basis, as of April 5.
On March 17, Benchmark analyst Matthew Harrigan revised his price target on Zoom Video Communications, Inc. (NASDAQ:ZM) to $95 from $102 and maintained a Buy rating on the shares.
