In this article, we discuss 10 EV stocks to buy according to Cathie Wood.
Cathie Wood of ARK Investment Management is one of the most prominent growth investors on Wall Street. Her hedge fund holds stakes in prominent tech firms like Amazon.com, Inc. (NASDAQ:AMZN), Sea Limited (NYSE:SE), and Roblox Corporation (NYSE:RBLX). Wood is also a big believer in electric vehicle stocks. In April, her fund released research that projected the share price of EV maker Tesla, Inc. (NASDAQ:TSLA), coincidentally also the top holding in the ARK portfolio, would reach $4,600 per share by 2026.
However, Wood has reduced her exposure to Tesla, Inc. (NASDAQ:TSLA) in recent months, trimming the stake of ARK in the EV firm by 6%, 27%, 51%, and 18% in the last four quarters. Tesla, Inc. (NASDAQ:TSLA) is still the largest holding in the ARK equity portfolio, but it seems that Wood is shifting her focus to other EV stocks, some of which are discussed below. Tesla, Inc. (NASDAQ:TSLA), which was the largest holding of the flagship ARK Innovation ETF for more than four years, has also lost that position recently.
Wood, during a monthly market webinar, conceded the pressure that her fund has been under in the past few months, claiming that worrisome data out of China and Europe pointed towards a “global recession”. The famed investor, who has doubled down on her growth bets during this period, also stressed that commodity prices were beginning to top out, pointing to the fall in prices of new and used cars as an example. The portfolio value of ARK Investment Management has fallen from $33 billion in December 2021 to $23 billion in March 2022.
Our Methodology
These were picked from the investment portfolio of ARK Investment Management at the end of the first quarter of 2022. Only equities that operate in the EV sector were selected. In order to provide readers with a more comprehensive overview of the companies, the analyst ratings for each firm are mentioned alongside other details. A database of around 900 elite hedge funds tracked by Insider Monkey was used to quantify the popularity of each stock in the hedge fund universe.
Cathie Wood of ARK Investment Management
EV Stocks to Buy According to Cathie Wood
10. Tesla, Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 91
Tesla, Inc. (NASDAQ:TSLA) makes and sells electric vehicles and clean energy equipment. Latest data shows that ARK owned over 1.5 million shares of Tesla, Inc. (NASDAQ:TSLA) at the end of the first quarter of 2022 worth $1.7 billion, representing 7.17% of the portfolio. The company has been in the ARK portfolio since the first quarter of 2018. In the first three months of 2022, the fund decreased its stake in the EV company by around 18% compared to filings for the fourth quarter of 2021.
On May 19, Wedbush analyst Daniel Ives maintained an Outperform rating on Tesla, Inc. (NASDAQ:TSLA) stock and lowered the price target to $1,000 from $1,400, citing reduced estimates and a lower multiple as some of the reasons behind the target cut.
At the end of the fourth quarter of 2021, 91 hedge funds in the database of Insider Monkey held stakes worth $12.9 billion in Tesla, Inc. (NASDAQ:TSLA), compared to 60 in the previous quarter worth $10.6 billion.
Just like Amazon.com, Inc. (NASDAQ:AMZN), Sea Limited (NYSE:SE), and Roblox Corporation (NYSE:RBLX), Tesla, Inc. (NASDAQ:TSLA) is one of the stocks that elite investors are monitoring.
Here is what ClearBridge Investments had to say about Tesla, Inc. (NASDAQ:TSLA) in its Q4 2021 investor letter:
“Within the growth universe we target, emerging growth stocks – the category with the highest revenue growth rates – significantly underperformed the overall growth categories in 2021 after leading performance in 2020. The pull-through effect on digitization, online access across industries, and spending to modernize outdated corporate infrastructures accelerated trends in a highly compressed time frame. Much of that trend slackened in 2021 and shares of these companies, while showing good top-line growth, saw slowing appreciation from the blistering pace in the prior year. With that moderating growth, multiples decelerated from 2020 highs. Bucking the headwinds among our emerging growth names was Tesla, Inc. (NASDAQ:TSLA) which saw continued sales momentum from their leadership positions in the key growth areas of electric vehicles.”
9. Baidu, Inc. (NASDAQ:BIDU)
Number of Hedge Fund Holders: 38
Baidu, Inc. (NASDAQ:BIDU) is a diversified technology company. Bidu has partnered with auto firm Geely for an EV startup named Jidu that raised over $400 million at a funding round earlier this year. Securities filings show that ARK owned 177,142 shares of Baidu, Inc. (NASDAQ:BIDU) at the end of March 2022 worth $23 million, representing 0.09% of the portfolio.
On May 16, JPMorgan analyst Alex Yao upgraded Baidu, Inc. (NASDAQ:BIDU) stock to Neutral from Underweight and raised the price target to $125 from $90, appreciating the recent regulatory announcements from China that had abated some uncertainties around Baidu.
At the end of the fourth quarter of 2021, 38 hedge funds in the database of Insider Monkey held stakes worth $1.4 billion in Baidu, Inc. (NASDAQ:BIDU), compared to 44 in the preceding quarter worth $2 billion.
In its Q3 2021 investor letter, Ariel Investments, an asset management firm, highlighted a few stocks and Baidu, Inc. (NASDAQ:BIDU) was one of them. Here is what the fund said:
“When we have such a high level of conviction for a company it is not uncommon for us to own it in size across our portfolios. Such is the case with technology giant Baidu, Inc. (NASDAQ:BIDU), whose leading search engine has been dubbed the “Google of China.” This quarter shares sold off in sympathy with the Chinese internet sector as investors were rattled by the government’s sweeping regulatory crackdown intended to promote “common prosperity” by easing wealth inequality. While we recognize the greater political risk of investing in emerging markets such as China and incorporate an appropriately higher risk premium in the discount rate in our valuation models, we believe Baidu’s business strategy is aligned with national policies and priorities and is therefore not adversely impacted unlike some other players in the internet sector who are in the eye of the storm.
Indeed, the Chinese government recognizes Baidu’s large, upfront investments in many next-generation artificial intelligence (AI) technologies and hails it as a national champion. For example, the company’s Advanced Driving Support System (ADAS), Apollo, has twice as much data on miles driven than any other initiative in the world, giving Baidu, Inc. (NASDAQ:BIDU) (and China) a large lead in the global AI arms race. In addition, Baidu’s cloud offering touts highly differentiated Platform as a Service (PaaS) features and capabilities for a demanding enterprise customer base. While these initiatives are a temporary drag on margins and require long-term execution, their success will bolster China’s “dual circulation” strategy aimed at spurring domestic demand, innovation and self-reliance.” (Click here to see the full text)
8. Niu Technologies (NASDAQ:NIU)
Number of Hedge Fund Holders: 13
Niu Technologies (NASDAQ:NIU) markets smart electric scooters. Regulatory filings reveal that ARK owned over 2.4 million shares of Niu Technologies (NASDAQ:NIU) at the end of the first quarter of 2022 worth $23 million, representing 0.09% of the portfolio. The company has been in the ARK portfolio since the third quarter of 2020. ARK reduced its stake in the electric scooter firm by 23% in the first quarter of 2022 compared to fourth quarter data. ARK has reduced its stake in the firm in the last two quarters after adding to it in the first two quarters of 2021.
On April 14, Jefferies analyst Kelly Zou initiated coverage of Niu Technologies (NASDAQ:NIU) stock with a Hold rating and a price target of $10.50, predicting that the total addressable market for EV stocks in China would expand at an annual growth rate of 10% till 2025.
At the end of the fourth quarter of 2021, 13 hedge funds in the database of Insider Monkey held stakes worth $107 million in Niu Technologies (NASDAQ:NIU), up from 12 in the previous quarter worth $131 million.
7. Magna International Inc. (NYSE:MGA)
Number of Hedge Fund Holders: 28
Magna International Inc. (NYSE:MGA) markets auto parts and equipment. The company has many EV-related projects ongoing, including a plan to build modular EV platforms and efficient EV batteries for use by EV firms. Latest 13F filings show that ARK owned over 409,000 shares of Magna International Inc. (NYSE:MGA) at the end of March 2022 worth $26.3 million, representing 0.10% of the portfolio. The firm has been in the ARK portfolio since the fourth quarter of 2020.
On May 10, Benchmark analyst Michael Ward maintained a Buy rating on Magna International Inc. (NYSE:MGA) stock and lowered the price target to $77 from $92, citing “valuation, above market growth, and historical cash returns” to justify the bullish rating.
At the end of the fourth quarter of 2021, 28 hedge funds in the database of Insider Monkey held stakes worth $477 million in Magna International Inc. (NYSE:MGA), compared to 29 in the previous quarter worth $444 million.
6. XPeng Inc. (NYSE:XPEV)
Number of Hedge Fund Holders: 29
XPeng Inc. (NYSE:XPEV) makes and sells electric vehicles. Latest 13F filings show that ARK owned 928,648 shares of XPeng Inc. (NYSE:XPEV) at the end of March 2022 worth $25.6 million, representing 0.10% of the portfolio of the fund. The tech firm has been in the ARK portfolio since the fourth quarter of 2021. The hedge fund led by Wood increased its stake in the Chinese EV firm by 35% in the first three months of 2022 compared to filings for the fourth quarter of 2021.
On April 1, HSBC analyst Yuqian Ding initiated coverage of XPeng Inc. (NYSE:XPEV) stock with a Buy rating and a price target of $37, noting that the latest autonomous driving system of the company was “one of the best available in China”.
At the end of the fourth quarter of 2021, 29 hedge funds in the database of Insider Monkey held stakes worth $1.1 billion in XPeng Inc. (NYSE:XPEV), up from 25 in the preceding quarter worth $657 million.
Alongside Amazon.com, Inc. (NASDAQ:AMZN), Sea Limited (NYSE:SE), and Roblox Corporation (NYSE:RBLX), XPeng Inc. (NYSE:XPEV) is one of the stocks that elite investors are buying.
5. Altair Engineering Inc. (NASDAQ:ALTR)
Number of Hedge Fund Holders: 16
Altair Engineering Inc. (NASDAQ:ALTR) provides software and cloud solutions. The firm offers e-mobility design solutions as well as data analytics related to system modeling of EVs. Latest data shows that ARK owned 170,595 shares of Altair Engineering Inc. (NASDAQ:ALTR) at the end of March 2022 worth over $10.9 million, representing 0.04% of the portfolio. Wood had first bought a stake in the firm during the second quarter of 2019. The fund slashed its stake in the firm by 21% in early 2022 compared to fourth quarter data.
Altair Engineering Inc. (NASDAQ:ALTR) posted earnings for the first quarter of 2022 on May 5, reporting earnings per share of $0.38, beating estimates by $0.08. The revenue over the period was $159 million, beating expectations by $5.4 million.
Among the hedge funds being tracked by Insider Monkey, Waltham-based investment firm Matrix Capital Management is a leading shareholder in Altair Engineering Inc. (NASDAQ:ALTR), with 8.6 million shares worth more than $553 million.
In its Q4 2021 investor letter, Harding Loevner, an asset management firm, highlighted a few stocks and Altair Engineering Inc. (NASDAQ:ALTR) was one of them. Here is what the fund said:
“Michigan-based Altair Engineering Inc. (NASDAQ:ALTR) was founded in 1985 to provide structural simulation and modeling to the automotive industry, beginning with software that simulated the effects of a car crash. Now, Altair’s HyperWorks suite of software is used extensively by automakers throughout the design and engineering process, including for elimination of noise and vibration, understanding fluid dynamics, and thermal management. Carmakers use the software to design components that are lighter and more aerodynamic to respond to tightening regulatory standards for gas mileage and carbon emissions, and in electric vehicle (EV) design where lighter-weight parts are even more critical (for extending battery range) and noise reduction is even more of an issue (in the absence of engine noise to mask sounds). HyperWorks users can compare the performance level of different design features and identify the most optimal. It also offers a toolset for durability analysis including an embedded materials library to predict fatigue life under a range of conditions. Similar types of engineering challenges occur in other industries, and Altair Engineering Inc. (NASDAQ:ALTR) works with many of them, including aerospace, heavy equipment, industrial machinery, rail, and marine companies.” (Click here to see full text)
4. Garmin Ltd. (NASDAQ:GRMN)
Number of Hedge Fund Holders: 34
Garmin Ltd. (NASDAQ:GRMN) makes and sells electronic components and devices. The company has partnered with EV maker Ford for incorporation of a communications and entertainment system made by the former for use in the cars of the latter. Securities filings show that ARK owned 87,487 shares of Garmin Ltd. (NASDAQ:GRMN) at the end of March 2022 worth $10.3 million, representing 0.04% of the portfolio. The company has been in the ARK portfolio since the first quarter of 2021.
On May 6, Tigress Financial analyst Ivan Feinseth maintained a Strong Buy rating on Garmin Ltd. (NASDAQ:GRMN) stock and raised the price target to $208 from $205, appreciating the strong first quarter sales numbers from the company.
At the end of the fourth quarter of 2021, 34 hedge funds in the database of Insider Monkey held stakes worth $579 million in Garmin Ltd. (NASDAQ:GRMN), up from 30 in the previous quarter worth $465 million.
3. Autodesk, Inc. (NASDAQ:ADSK)
Number of Hedge Fund Holders: 52
Autodesk, Inc. (NASDAQ:ADSK) provides design and engineering software services. Leading EV brands like Tesla use the simulation services of Autodesk in their vehicle design processes. Regulatory filings reveal that ARK owned 42,545 shares of Autodesk, Inc. (NASDAQ:ADSK) at the end of the first quarter of 2022 worth $9.1 million, representing 0.03% of the portfolio. The company has been in the ARK portfolio since the first quarter of 2018. The fund slashed its stake in the firm by 23% in early 2022 compared to filings for late 2021.
On May 18, Mizuho analyst Matthew Broome kept a Buy rating on Autodesk, Inc. (NASDAQ:ADSK) stock and lowered the price target to $250 from $285, highlighting that overall software demand was strong despite the selloff in the broader market.
At the end of the fourth quarter of 2021, 52 hedge funds in the database of Insider Monkey held stakes worth $1.7 billion in Autodesk, Inc. (NASDAQ:ADSK), compared to 54 the preceding quarter worth $2.3 billion.
In its Q4 2021 investor letter, Polen Capital, an asset management firm, highlighted a few stocks and Autodesk, Inc. (NASDAQ:ADSK) was one of them. Here is what the fund said:
“We added to Autodesk, Inc. (NASDAQ:ADSK) on share price weakness. Near-term concerns have made the valuations of the company quite attractive in our view. Autodesk has consistently reported solid results, but management recently provided lower than expected guidance, noting supply chain issues, inflation squeezing its customer margins, global labor shortages, and complications from rolling and unpredictable COVID lockdowns globally. In aggregate, these issues mean that fewer client projects have been completed, despite high endmarket demand. Ultimately, many of these productivity pressures will likely drive the need to digitize further.
To be clear, much of the pressure on Autodesk’s share price recently was due to expectations, not a decline in the fundamentals of the business. Autodesk, Inc. (NASDAQ:ADSK) continues to grow revenues at greater than mid-teens rates while simultaneously enjoying record renewal rates. While each of the noted factors present real challenges in the near term, we think the lower share price provides long-term investors an opportunity. Given the secular trend towards digitization and the ever-increasing mission-critical nature of Autodesk’s products, we are confident in the long-term investment case. “
2. NIO Inc. (NYSE:NIO)
Number of Hedge Fund Holders: 30
NIO Inc. (NYSE:NIO) makes and sells smart electric vehicles. Latest 13F filings show that ARK owned over 420,000 shares of NIO Inc. (NYSE:NIO) at the end of March 2022 worth $8.8 million, representing 0.03% of the portfolio. The firm is a new addition to the ARK portfolio compared to filings for the fourth quarter of 2021. The firm was recently listed on the Main Board of the Singapore Exchange Securities Trading Limited. The listing means that the company is the first Chinese automaker to trade on exchanges in the US, Hong Kong, and Singapore.
On May 16, analyst Ming Hsun Lee upgraded NIO Inc. (NYSE:NIO) stock to Buy from Neutral and raised the price target to $26 from $25, underlining that the upgrade was based on improving sales and better margins.
At the end of the fourth quarter of 2021, 30 hedge funds in the database of Insider Monkey held stakes worth $813 million in NIO Inc. (NYSE:NIO), the same as in the preceding quarter worth $1.1 billion.
1. Honeywell International Inc (NASDAQ:HON)
Number of Hedge Fund Holders: 51
Honeywell International Inc. (NASDAQ:HON) is a diversified technology and manufacturing company. The firm markets electric and hybrid electric propulsion systems used in electric engines. It also offers EV thermal management services. Latest 13F filings show that ARK owned 29,482 shares of Honeywell International Inc. (NASDAQ:HON) at the end of March 2022 worth $5.7 million, representing 0.02% of the portfolio of the fund. The tech firm has been in the ARK portfolio since the fourth quarter of 2020.
On May 2, Citi analyst Andrew Kaplowitz maintained a Buy rating on Honeywell International Inc. (NASDAQ:HON) stock and raised the price target to $232 from $229, noting that the firm had the ability to effectively execute despite ongoing supply chain and inflationary pressures.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm DE Shaw is a leading shareholder in Honeywell International Inc. (NASDAQ:HON), with 1.6 million shares worth more than $342 million.
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Disclosure. None. 10 EV Stocks to Buy According to Cathie Wood is originally published on Insider Monkey.
