Cathie Wood’s Latest Stock Portfolio: Top 10 Stock Picks
In this piece, we will take a look at Cathie Wood's latest investment portfolio and her top ten stock picks. If you want to skip our coverage of Ms. Wood, her investment firm, and the latest stock market news, then you can take a look at Cathie Wood's Latest Stock Portfolio: Top 5 Stock Picks.
While nearly all hedge funds invest in stocks, not all of them do so in the same manner. A fund's investment philosophy depends on a variety of factors, that are primarily determined by the nature of its head. For instance, two of the most well known hedge funds and investment holdings companies of our time are D. E. Shaw's DE Shaw and Warren Buffett's Berkshire Hathaway. Both of them are behemoths in the industry, but their investment approaches couldn't be further apart. Shaw, a mathematical wizard, focuses on the numbers and a secret sauce formula. Buffett, on the other hand, is a seasoned player who carefully picks out the right stocks and then holds on to them for dear life to reap literal and figurative dividends.
Another hedge fund boss famous for her unique approach to investing is Cathie Wood. While Buffett is somewhat of a consumer staples investor who picks out only those companies that are well established and have wide competitive moats, Wood is a risky player. Her fund identifies firms that are most likely to disrupt their industries and then continues to invest in the hopes of a share price appreciation. One of Wood's most successful bets, which has also propelled her to Wall Street fame, is her massive stake in the world's biggest electric vehicle manufacturer Tesla, Inc. (NASDAQ:TSLA). Wood has held on to Tesla's shares for as long as since the fourth quarter of 2016, and as an investor, she has seen it all. Based on Tesla's current stock structure following splits, a single share today that's worth $147 would have been worth $12 back then - implying that over the time period that Wood has owned the shares, Tesla's stock has appreciated by a stunning 1,125%. Identifying the right stocks always has its benefits and Wood has accrued these during her investment career.
However, 2024 and 2016 are quite different. Back then, the stock market climate was more relaxed when it came to liquidity and raising capital. This is helpful for both hedge funds - who rely on leverage to make their risky bets - and high growth companies like Tesla who have to fund their daily operations via working capital and long term growth through other capital raises. In today's environment with high interest rates, managers who invest in high growth stocks face a tough time on the market and this has also been the case for Wood.
Wood's flagship fund, the ARK Innovation ETF (NYSE:ARKK), was up by a stunning 211% in March 2020 and January 2021. Then, it held on to most of these gains during the tail end of the coronavirus pandemic as the technology industry boomed due to a higher demand for computing products. 2022, marked by soaring inflation and anarchy on Wall Street because of high interest rates, wasn't great for the fund as the Ark Innovation ETF had tanked by 47% during the year. This erased all gains made during the pandemic and the ARK Innovation ETF hasn't been the same since as it currently trading at $42 - lower than its price of $44 at the onset of the stock market boom during the coronavirus pandemic.
Another well known fact about Ark Invest is its willingness to regularly share insights. On this front, Wood was out with her thoughts for the first quarter of 2024 in a recent commentary where she outlined:
The Federal Funds Target Rate surged 24-fold in little more than a year. The deflationary ramifications of current Fed policy already are surfacing through bankruptcies in commercial real estate, both office and multi-family, and could culminate in another round of regional bank failures. If the Fed were to lower interest rates in response, companies sacrificing short-term profitability to invest and potentially capitalize on technologically enabled super exponential growth opportunities should be prime beneficiaries.
The Fed paused its tightening moves last summer. At the same time, in the technology realm, ChatGPT began to dramatize the seemingly miraculous breakthroughs that are likely to tip the scales even further toward broad-based deflation. Although creative destruction—the transition from gas-powered vehicles to electric vehicles, for example—could obfuscate the boom associated with AI and other disruptive technologies evolving today, the waves of growth associated with the convergence among the 14 technologies involved in our five major platforms—robotics, energy storage, AI, blockchain technology, and multiomics sequencing—should start moving the needle on macro metrics increasingly and significantly during the next five to ten years.
In our view, history will show that inflation, initially triggered by supply shocks, was transitory and evolved into disinflation, then ultimately deflation. Consequently, interest rates are likely to surprise on the low side of expectations, broadening last year’s equity rally from a narrow subset of stocks.
During the first quarter of 2024, four of ARK’s six actively managed ETFs and both indexed ETFs underperformed relative to the broad-based global equity indexes, while two actively managed ETFs had mixed performance, underperforming and the S&P 500 Index but outperforming the MSCI World Index.
So, with Wood remaining as optimistic as ever, we decided to see what her latest stock picks are. A couple of important names are Tesla, Inc. (NASDAQ:TSLA), Coinbase Global, Inc. (NASDAQ:COIN), and Block, Inc. (NYSE:SQ).
Cathie Wood of ARK Investment Management
Our Methodology
To make our list of Cathie Wood's latest stock picks, we took a look at Ark Invest's first quarter of 2024 investment portfolio and selected the biggest positions.
For these latest Cathie Wood stock picks, we mentioned hedge fund sentiment. Hedge funds’ top 10 consensus stock picks outperformed the S&P 500 Index by more than 140 percentage points over the last 10 years (see the details here). That’s why we pay very close attention to this often-ignored indicator.
Cathie Wood's Latest Stock Portfolio: Top 10 Stock Picks
10. DraftKings Inc. (NASDAQ:DKNG)
Number of Q4 2023 Hedge Fund Shareholders: 55
Ark Invest's Q1 2024 Investment Stake: $395 million
DraftKings Inc. (NASDAQ:DKNG) is an online gambling company headquartered in Boston, Massachusetts. While it was a top Cathie Wood stock pick during the first quarter, her fund did reduce its stake by 30% during the quarter. DraftKings Inc. (NASDAQ:DKNG)'s investors were in for some good news in April 2024 after Goldman Sachs initiated coverage, and set a share rating of Buy and a share price target of $60.
55 out of the 933 hedge funds part of Insider Monkey's Q4 2023 database had invested in DraftKings Inc. (NASDAQ:DKNG). Along with Tesla, Inc. (NASDAQ:TSLA), Coinbase Global, Inc. (NASDAQ:COIN), and Block, Inc. (NYSE:SQ), it is a top Cathie Wood stock pick.
9. Zoom Video Communications, Inc. (NASDAQ:ZM)
Number of Q4 2023 Hedge Fund Shareholders: 41
Ark Invest's Q1 2024 Investment Stake: $413 million
Zoom Video Communications, Inc. (NASDAQ:ZM) is a software company known for its video conferencing software. The firm has been doing well on the financial front as of late since it has beaten analyst EPS estimates in all four of its latest quarters. Cathie Wood cut her stake by 43% in Zoom Video Communications, Inc. (NASDAQ:ZM) during the first quarter of 2024.
In the prior quarter, 41 out of the 933 hedge funds tracked by Insider Monkey were the firm's investors. Zoom Video Communications, Inc. (NASDAQ:ZM)'s largest hedge fund investor in the fourth quarter was Cathie Wood's ARK Investment Management due to its $788 million stake.
8. Roblox Corporation (NYSE:RBLX)
Number of Q4 2023 Hedge Fund Shareholders: 50
Ark Invest's Q1 2024 Investment Stake: $451 million
Roblox Corporation (NYSE:RBLX) is an entertainment company that provides a metaverse digital environment to let users interact with each other and play video games. The firm is currently busy increasing its platform's monetization and teamed up with an advertising technology company in April 2024 for this purpose.
Insider Monkey dug through 933 hedge funds for their fourth quarter of 2023 shareholdings to find 50 Roblox Corporation (NYSE:RBLX) shareholders. ARK Investment Management owned the biggest stake which was worth $445 million.
7. Robinhood Markets, Inc. (NASDAQ:HOOD)
Number of Q4 2023 Hedge Fund Shareholders: 21
Ark Invest's Q1 2024 Investment Stake: $527 million
Robinhood Markets, Inc. (NASDAQ:HOOD) is another software company. It provides a digital platform to enable users to buy and sell stocks from the comfort of their homes. Its investors were dealt a blow in April 2024 when Citi downgraded the stock to Sell from Neutral as it worried that recent share price appreciations could have squeezed out all potential valuation premiums.
As of December 2023 end, 21 out of the 933 hedge funds profiled by Insider Monkey had bought and owned the firm's shares. Robinhood Markets, Inc. (NASDAQ:HOOD)'s largest shareholder out of these was Cathie Wood's fund as it owned $445 million worth of shares.
6. CRISPR Therapeutics AG (NASDAQ:CRSP)
Number of Q4 2023 Hedge Fund Shareholders: 21
Ark Invest's Q1 2024 Investment Stake: $527 million
CRISPR Therapeutics AG (NASDAQ:CRSP) is one of the most advanced biotechnology companies in the world due to its advanced gene editing technologies. The tail end of the first quarter wasn't great for the stock as it has lost 38% of its value since late February 2024.
21 out of the 933 hedge funds covered by Insider Monkey's Q4 2023 research had held a stake in CRISPR Therapeutics AG (NASDAQ:CRSP). Catherine D. Wood's ARK Investment Management was the biggest investor as it held $534 million worth of shares.
Tesla, Inc. (NASDAQ:TSLA), CRISPR Therapeutics AG (NASDAQ:CRSP), Coinbase Global, Inc. (NASDAQ:COIN), and Block, Inc. (NYSE:SQ) are some of Cathie Wood's latest stock picks.
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Disclosure. None. Cathie Wood's Latest Stock Portfolio: Top 10 Stock Picks was initially published on Insider Monkey.