5 Best Software Stocks to Buy According to Cathie Wood

3. Zillow Group, Inc. (NASDAQ: Z)

Number of Hedge Fund Holders: 82

Zillow Group, Inc. (NASDAQ: Z) is a Washington-based online real estate company founded in 2004. It is ranked third on our list of 10 best software stocks to buy according to Cathie Wood. Zillow stock has returned more than 101% to investors over the past year. The hedge fund run by Wood owns more than 10 million shares in the company worth over $1.3 billion, representing close to 2.6% of the investment portfolio of ARK Investment. Zillow has stakes in the finance and insurance businesses as well. 

On April 21, Zillow Group, Inc. (NASDAQ: Z) stock was given a Buy rating with a $230 price target by investment advisory Benchmark on the back of strong growth prospects for Zillow that had earlier dropped close to 37% after hitting a 52-week high in February. 

Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm SRS Investment Management is a leading shareholder in Zillow Group, Inc. (NASDAQ: Z) with 7.3 million shares worth more than $946 million. 

In its Q1 2021 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Zillow Group, Inc. (NASDAQ: Z) was one of them. Here is what the fund said:

“Zillow Group, Inc. operates leading U.S. real estate sites, a mortgage marketplace, and the Zillow Offers home-buying business. Shares fell during the quarter in concert with the broader rotation out of technology-based stocks despite the company’s continued inflection in mortgages revenue, strong profitability in its core business, and a positive real estate outlook as Zillow builds out its iBuying ecosystem. In our view, Zillow is a leader in the large online real estate advertising market with substantial upside from mortgages and Offers, and we remain investors.”