In this article, we discuss the 10 growth stocks that Cathie Wood is buying.
Cathie Wood of ARK Investment Management manages an equity portfolio that was worth close to $17 billion at the end of the second quarter of 2022. Wood, a prominent tech bull, has backed companies like Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), and Alphabet Inc. (NASDAQ:GOOG) to emerge from the present macro crisis with deep value for investors. The value of her equity portfolio has plummeted by close to $6 billion in the past few months as growth stocks are hammered due to soaring inflation and rising rates.
Wood has refused to back down from her growth-focused investing strategy. On September 14, merely hours after the United States government released hotter-than-expected inflation data for August that induced a mass selloff at the market, Wood used the opportunity to bolster her stakes in 27 prominent growth names, per data compiled by news publication Bloomberg. This was the biggest buying spree for her fund since February this year and came as the tech-focused NASDAQ Composite posted the worst drop since March 2020.
The flagship fund of Cathie Wood, the ARK Innovation ETF, has lost close to 57% in value year-to-date as a series of rate hikes by the Federal Reserve pummel growth names. As another rate hike is expected in the coming days, the fund could drop even lower. Wood has sought to calm her clients by tweeting that there were several deflationary indicators in the pipeline and the buying spree of her fund was meant to position for this. Wood pointed to falling prices of gold, lumber, copper, and other basic materials to make her point.
Our Methodology
These were picked according to the investment portfolio of ARK Investment Management at the end of the second quarter of 2022. Only equities in which the hedge fund increased stakes by at least 20% or more, between March and June, compared to first quarter filings, 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 in the second quarter of 2022 was used to quantify the popularity of each stock in the hedge fund universe.
Cathie Wood of ARK Investment Management
Cathie Wood is Buying These Growth Stocks
10. Matterport, Inc. (NASDAQ:MTTR)
Number of Hedge Fund Holders: 7
Percentage Increase in Stake During Q2 2022: 95%
Matterport, Inc. (NASDAQ:MTTR), a spatial data company, focuses on the digitization and datafication of the built world. ARK Investment Management owned 1 million shares in Matterport, Inc. at the end of June 2022 worth $5.6 million, representing 0.03% of the portfolio of the fund.
On August 16, Wolfe Research analyst Gal Munda initiated coverage of Matterport, Inc. stock with a Peer Perform rating, noting the firm produced best-in-class reality capture software for a number of industries.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Tiger Global Management is a leading shareholder in Matterport, Inc., with 3.6 million shares worth more than $13 million.
Just like Apple Inc., Microsoft Corporation, and Alphabet Inc., Matterport, Inc. is one of the stocks feeling the heat of an economic slowdown.
In its Q4 2021 investor letter, Miller Value Partners, an asset management firm, highlighted a few stocks and Matterport, Inc. was one of them. Here is what the fund said:
“Matterport, Inc. continued to be a strong contributor during the quarter after Matterport’s ability to contribute to the building of the metaverse was brought to light. The company reported 3Q results that missed consensus due to unexpected supply constraints and labor shortage in its capture services. The company reported total sales of $27.7M below consensus of $29.1M but with gross profit beating coming in at $15.2M versus $15.1M expected leading to an EPS loss of -$0.06 slightly better than consensus of -$0.07. The company lowered full-year revenue guidance to $107-110M down from $120-126M previously while also lowering FY22 topline guidance to 50% growth from 65% at the time of the PIPE transaction due to continuing supply constraints and labor shortage.”
9. Nurix Therapeutics, Inc. (NASDAQ:NRIX)
Number of Hedge Fund Holders: 12
Percentage Increase in Stake During Q2 2022: 99%
Nurix Therapeutics, Inc. (NASDAQ:NRIX), a biopharmaceutical company, focuses on the discovery, development, and commercialization of small molecule therapies for the treatment of cancer and immune disorders. ARK Investment Management owned 778,725 shares in Nurix Therapeutics, Inc. at the end of June 2022 worth $7.8 million, representing 0.04% of the portfolio of the fund.
On July 8, Stifel analyst Stephen Willey maintained a Buy rating on Nurix Therapeutics, Inc. stock and lowered the price target to $37 from $44, noting the firm had posted an in-line earnings announcement and corporate update.
At the end of the second quarter of 2022, 12 hedge funds in the database of Insider Monkey held stakes worth $163 million in Nurix Therapeutics, Inc., compared to 20 the preceding quarter worth $129.8 million.
8. Fiverr International Ltd. (NYSE:FVRR)
Number of Hedge Fund Holders: 16
Percentage Increase in Stake During Q2 2022: 23%
Fiverr International Ltd. (NYSE:FVRR) operates an online marketplace worldwide. At the end of June 2022, ARK Investment Management owned 40,565 shares in Fiverr International Ltd. worth $1.7 million, representing 0.01% of the portfolio.
On August 5, Needham analyst Bernie McTernan maintained a Buy rating on Fiverr International Ltd. stock and raised the price target to $50 from $40, noting the firm was ramping up profitability faster in response to a continued lack of end market momentum.
Among the hedge funds being tracked by Insider Monkey, Washington-based firm Millennium Management is a leading shareholder in Fiverr International Ltd., with 678,656 shares worth more than $23 million.
7. Global-e Online Ltd. (NASDAQ:GLBE)
Number of Hedge Fund Holders: 17
Percentage Increase in Stake During Q2 2022: 45%
Global-e Online Ltd. (NASDAQ:GLBE) provides a platform to enable and accelerate direct-to-consumer cross-border e-commerce. The hedge fund of Cathie Wood owned 812,173 shares of Global-e Online Ltd. at the end of the second quarter of 2022 worth more than $15.6 million, representing 0.09% of the total portfolio.
On August 17, Morgan Stanley analyst James Faucette maintained an Overweight rating on Global-e Online Ltd. stock and raised the price target to $51 from $34, backing the firm to continue strong progress into next year.
At the end of the second quarter of 2022, 17 hedge funds in the database of Insider Monkey held stakes worth $509 million in Global-e Online Ltd., compared to 26 in the previous quarter worth $950 million.
In its Q4 2021 investor letter, Artisan Partners, an asset management firm, highlighted a few stocks and Global-e Online Ltd. was one of them. Here is what the fund said:
“We added to several positions during the quarter including Global-e Online Ltd.. Global-e online is a global e-commerce service platform enabling cross-border transactions across 200+ countries. It provides three critical elements: website localization, payments and logistics. For background, ~30% of a global brand’s online traffic is from international shoppers, though the portion of its international sales is no more than 5%-10% as brands struggle to overcome numerous cross-border challenges—different languages, currencies, payment methods, duties/taxes and shipping providers. There is no one-size-fits-all solution as each market is unique; hence, merchants of all sizes find a do-it-yourself cross-border strategy to be complex, costly and difficult to maintain. In our view, the capability of Global-e online’s platform to remove these frictions was recently validated by its strategic partnership with e-commerce platform giant Shopify, which also made an equity investment in the company. With strong current performance and the potential for accelerated growth once Global-e completes its technological integration with Shopify’s platform, we added to our GardenSM position.”
6. Wix.com Ltd (NASDAQ:WIX)
Number of Hedge Fund Holders: 24
Percentage Increase in Stake During Q2 2022: 32%
Wix.com Ltd (NASDAQ:WIX) develops and markets a cloud-based platform that enables anyone to create a website or web application. The hedge fund of Cathie Wood owned 26,038 shares of Wix.com Ltd at the end of the second quarter of 2022 worth more than $1.6 million, representing a small portion of the total portfolio.
On August 11, RBC Capital analyst Brad Erickson maintained a Sector Perform rating on Wix.com Ltd stock and increased the price target to $80 from $75, noting the second quarter earnings of the firm were consistent with checks.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Eminence Capital is a leading shareholder in Wix.com Ltd, with 1.6 million shares worth more than $105 million.
In addition to Apple Inc., Microsoft Corporation, and Alphabet Inc., Wix.com Ltd is one of the stocks that hedge funds are monitoring as inflation heats up.
5. Coinbase Global, Inc. (NASDAQ:COIN)
Number of Hedge Fund Holders: 29
Percentage Increase in Stake During Q2 2022: 29%
Coinbase Global, Inc. (NASDAQ:COIN) provides financial infrastructure and technology for the crypto economy. Latest data shows that ARK Investment Management owned 8.9 million shares of Coinbase Global, Inc. at the end of the second quarter of 2022 worth $699 million, representing 4.13% of the portfolio.
On September 14, JPMorgan analyst Kenneth Worthington maintained a Neutral rating on Coinbase Global, Inc. stock and raised the price target to $78 from $64, noting the firm had a substantial revenue opportunity that originates from higher interest rates.
At the end of the second quarter of 2022, 29 hedge funds in the database of Insider Monkey held stakes worth $1.2 billion in Coinbase Global, Inc., compared to 46 in the preceding quarter worth $2.3 billion.
In its Q2 2022 investor letter, Miller Value Partners, an asset management firm, highlighted a few stocks and Coinbase Global, Inc. was one of them. Here is what the fund said:
“Coinbase Global, Inc. fell during the quarter as the crypto markets continued to suffer. While the company reported disappointing results, it committed to capping EBITDA losses at $500M even in the event of “a prolonged market downturn”. COIN’s ample liquidity ($6b in cash on hand) should enable them to survive a prolonged “crypto winter” and invest to strengthen the business in the downturn. While the crypto market is early in its adoption, Coinbase is focused on building the platform for crypto not only supporting trading, and cold storage, but moving into NFTs, staking, and crypto derivatives. We see tremendous upside potential for COIN over the next decade if they are able to successfully execute on their platform strategy.”
4. Roku, Inc. (NASDAQ:ROKU)
Number of Hedge Fund Holders: 34
Percentage Increase in Stake During Q2 2022: 23%
Roku, Inc. (NASDAQ:ROKU) operates a TV streaming platform, The hedge fund chaired by Wood owned close to 10.1 million shares of Roku, Inc. at the end of June 2022, worth $962 million.
On September 8, Pivotal Research analyst Jeffrey Wlodarczak upgraded Roku, Inc. stock to Hold from Sell with a price target of $60, noting the shares had reached a better risk/reward profile.
At the end of the second quarter of 2022, 34 hedge funds in the database of Insider Monkey held stakes worth $1.4 billion in Roku, Inc., compared to 34 in the preceding quarter worth $1.7 billion.
In its Q2 2022 investor letter, Saga Partners, an asset management firm, highlighted a few stocks and Roku, Inc. was one of them. Here is what the fund said:
“The Portfolio first bought Roku, Inc. in Q3’20. It was a company we followed closely given our investment in The Trade Desk and its importance in connected television (CTV). Roku continued to impressively grow its CTV market share and it took some extra work to understand the underlying dynamics causing Roku’s success. I think there is some misunderstanding surrounding the connected television landscape. Since I haven’t written extensively on the topic in past letters, I thought it would be helpful to provide a little more background on the underlying dynamics of the space below…(read more)
3. Roblox Corporation (NYSE:RBLX)
Number of Hedge Fund Holders: 38
Percentage Increase in Stake During Q2 2022: 22%
Roblox Corporation (NYSE:RBLX) develops and operates an online entertainment platform. Latest data shows that ARK Investment Management owned 7.4 million shares of Roblox Corporation at the end of the second quarter of 2022 worth $221 million, representing 1.31% of the portfolio.
On September 16, Needham analyst Bernie McTernan maintained a Buy rating on Roblox Corporation stock and lowered the price target to $53 from $55, noting that advertising presented a substantial revenue opportunity for the firm.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Renaissance Technologies is a leading shareholder in Roblox Corporation, with 11.6 million shares worth more than $380 million.
In its Q4 2021 investor letter, Tao Value, an asset management firm, highlighted a few stocks and Roblox Corporation was one of them. Here is what the fund said:
“Roblox Corporation got significant more attention from both institutional & retail investors after Facebook announced to rename itself as Meta Platforms. I believe the price appreciation is largely attributed to the increased attention. On business side, Roblox rolled out a few successful music events and also partnered with Netflix on testing long-form media consumption in virtual world. Apple in its iOS 14.5 rolled out an impactful change for digital advertising landscape by requiring all apps to ask users to “opt in”.
2. Cloudfare, Inc. (NYSE:NET)
Number of Hedge Fund Holders: 41
Percentage Increase in Stake During Q2 2022: 33%
Cloudfare, Inc. (NYSE:NET) operates as a cloud services provider that delivers a range of services to businesses worldwide. According to regulatory filings, ARK Investment Management owned 324,635 shares in Cloudflare, Inc. at the end of June 2022 worth $18 million, representing 0.10% of the portfolio.
On September 8, Cantor Fitzgerald analyst Jonathan Ruykhaver initiated coverage of Cloudflare, Inc. stock with a Neutral rating and a price target of $65, noting that the firm was a disruptor in the networking and security markets.
At the end of the second quarter of 2022, 41 hedge funds in the database of Insider Monkey held stakes worth $541 million in Cloudfare, Inc., compared to 44 in the previous quarter worth $1.2 billion.
In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Cloudfare, Inc. was one of them. Here is what the fund said:
“Despite posting solid quarterly results with 54% revenue growth, and a record addition of 14,000 customers, shares of Cloudflare, Inc., a software infrastructure provider, declined 63% in the quarter along with other fast-growing names in the software universe that penalize current profitability by reinvesting back in their businesses. We believe Cloudflare’s disruptive global platform and unmatched pace of innovation will enable the company to continue to take share across multiple large addressable markets for years to come.”
1. Shopify Inc. (NYSE:SHOP)
Number of Hedge Fund Holders: 60
Percentage Increase in Stake During Q2 2022: 35%
Shopify Inc. (NYSE:SHOP), a commerce company, provides an e-commerce platform and related services. The hedge fund chaired by Wood owned close to 1.2 million shares of Shopify Inc. at the end of June 2022 worth $455 million, representing 2.69% of the portfolio.
On September 8, Oppenheimer analyst Ken Wong maintained an Outperform rating on Shopify Inc. stock with a price target of $45, noting the leadership changes at the firm were likely to raise questions.
Among the hedge funds being tracked by Insider Monkey, London-based investment firm Fundsmith LLP is a leading shareholder in Shopify Inc., with 10.2 million shares worth more than $814 million.
In its Q2 2022 investor letter, Baron Funds, an asset management firm, highlighted a few stocks and Shopify Inc. was one of them. Here is what the fund said:
“Shopify Inc. is a cloud-based software provider offering an operating system for multi-channel commerce. Shares fell due to continued post-pandemic e-commerce normalization as economies reopen, concerns about competition following Amazon’s announcement of Buy with Prime, as well as the broader sell-off in growth stocks. We remain shareholders due to Shopify’s strong competitive positioning, innovative culture, and long runway for growth as it currently addresses less than 1% of global commerce spend.”
You can also take a peek at 10 Best Healthcare Dividend Stocks to Buy Now and 10 Dividend Stocks with Over 20 Years of Dividend Increases.
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This article is originally published at Insider Monkey.
