Cathie Wood’s Latest Portfolio: 10 New Stock Picks

In this article, we discuss the 10 new stocks that Cathie Wood added to her portfolio in Q4 2021.

Cathie Wood is the CEO, CIO, and founder of ARK Investment Management. Starting her career as an assistant economist at Capital Group in 1977, Cathie Wood has gone on to become one of Wall Street’s most popular investors, with her returns, investments, and insight into disruptive tech often making headlines in financial markets around the world. In 2020, Bloomberg named Cathie Wood as the best stock picker, as her ARK Innovation ETF posted a 170% return in a year that saw the stock market turn upside down amid the Covid pandemic.

ARK Investment Management invests primarily in disruptive tech with a long-term horizon. These are companies with the potential to disrupt billion-dollar markets and establish themselves as market leaders as the world economy evolves towards automation. Cathie believes that as the world continues to adopt artificial intelligence (AI) and rely more on smart computers, this will create ample room for newbie, innovative tech companies to become the next Amazon or Google stock.

Cathie Wood’s ARK Investment Management has been on a downward trajectory over the last several months, but Wood remains adamant her investment philosophy will hold true, despite all the criticism. She believes that innovative technologies such as robotics, energy storage, artificial intelligence, blockchain technology and DNA sequencing will scale and converge in the coming years, transforming the world order as we know it. In December, Wood assured investors that innovative tech stocks are not in a bubble, rather they are in ‘deep-value territory’. She added:

With a five-year investment time horizon, our forecasts for these platforms suggest that our strategies today could deliver a 30-40% compound annual rate of return during the next five years

Cathie Wood of ARK Investment Management

Some of the top stocks in Cathie Wood’s portfolio include Tesla, Inc. (NASDAQ:TSLA), Twitter, Inc. (NYSE:TWTR), and Coinbase Global, Inc. (NASDAQ:COIN). But with all this hype around Cathie Wood’s vision for disruptive tech heading into 2022, let’s take a look at the top 10 new stocks Cathie Wood added to her portfolio in the fourth quarter of 2021.

Our Methodology

We selected the top 10 stocks Cathie Wood added to her ARK Investment Management portfolio in Q4 2021, using her 13F filings for the quarter. Hedge fund sentiment around each stock was derived using Insider Monkey’s database of 867 elite hedge funds.

Let’s now start looking at Cathie Wood’s Latest Portfolio additions.

Cathie Wood’s Latest Portfolio: 10 New Stock Picks

10. Axon Enterprise, Inc. (NASDAQ:AXON)

ARK Investment Management’s Stake Value: $198,000

Percentage of ARK Investment Management’s 13F Portfolio: 0.001%

Number of Hedge Fund Holders: 32

Starting off the list of 10 new stocks Cathie Wood added to her portfolio in Q4 2021 is Axon Enterprise, Inc. (NASDAQ:AXON), a manufacturer of electrical weapon products that operates through its segments: TASER Weapons and Software and Sensors. The company’s products are routinely procured by the military, law enforcement agencies, and private consumers for personal protection. According to regulatory data for the fourth quarter, Cathie Wood added Axon Enterprise, Inc. to her portfolio, holding approximately 1,300 shares in the company worth $198,000.

Hedge funds were seen bullish on Axon Enterprise, Inc. as of the third quarter of 2021, with 32 hedge funds holding stakes in the company worth $529.8 million. This is up from 24 hedge funds in the second quarter with combined holdings of $513.6 million.

In December, JMP Securities analyst Erik Suppiger resumed coverage of Axon Enterprise, Inc. with an ‘Outperform’ rating and a price target of $195. The analyst noted that the company’s flagship TASER technology is increasingly being adopted as an alternative to guns, and its dominance in body-worn police cameras and cloud-based services also enhances its leadership position in the public safety technology market.

In February, Axon Enterprise, Inc. announced the opening of its first R&D (research and development) office in London, in a bid to expand its global footprint.

Conestoga Capital Advisors, an independent investment management firm, mentioned Axon Enterprise, Inc. in its Q4 2020 investor letter, stating:

“AAXN reported third quarter results that were materially ahead of expectations as the company benefitted from continued adoption of body cameras and software tools within police agencies, a surge in Federal bookings, which is a new focus for the company, and continued momentum within the international market. AAXN also introduced 2021 guidance that was ahead of sell-side estimates.”

Along with Tesla, Inc., Twitter, Inc., and Coinbase Global, Inc., Axon Enterprise, Inc. is an exciting stock in the portfolio of Cathie Wood’s ARK Investment Management.

9. GitLab Inc. (NASDAQ:GTLB)

ARK Investment Management’s Stake Value: $199,000

Percentage of ARK Investment Management’s 13F Portfolio: 0.001%

Number of Hedge Fund Holders: N/A

Up next on the list of new stocks Cathie Wood added to her portfolio in the fourth quarter is GitLab Inc. (NASDAQ:GTLB), a software firm with over 30 million registered users around the world, providing software solutions to companies such as Ticketmaster, Jaguar Land Rover, and Nasdaq, among others. ARK Investment Management reported owning roughly 2,300 shares of GitLab Inc. at the end of the fourth quarter, worth $199,000.

On February 4, RBC Capital analyst Matthew Hedberg upgraded GitLab Inc. to ‘Outperform’ from ‘Sector Perform’ with an unchanged price target of $90. Hedberg sees shares of GitLab Inc. priced reasonably after a recent pullback in price, and remains bullish on the company commanding a significant share of the DevSecOps (Development, Security, Operations) market which is worth an estimated $40 billion, as its platform allows the quick development and deployment of secure applications. In January, JPMorgan analyst Sterling Auty upgraded GitLab Inc. to an ‘Overweight’ rating and termed it a ‘Growth All-Star’.

GitLab Inc. posted an EPS of -$0.34 for the third quarter, beating consensus estimates by $0.14. Quarterly revenue of $66.80 million was also above analysts’ forecasts by $7.63 million.

8. Nurix Therapeutics, Inc. (NASDAQ:NRIX)

ARK Investment Management’s Stake Value: $1.27 million

Percentage of ARK Investment Management’s 13F Portfolio: 0.001%

Number of Hedge Fund Holders: 18

Then there’s Nurix Therapeutics, Inc. (NASDAQ:NRIX), in which Cathie Wood initiated a $1.27 million position comprising of roughly 44,000 shares at the close of the fourth quarter. The firm was recorded in the portfolio of 18 hedge funds in the third quarter, with combined holdings of $313.3 million. This is up from 17 hedge funds with stakes worth $270.9 million in Nurix Therapeutics, Inc. at the close of the second quarter of 2021.

Nurix Therapeutics, Inc. is a biopharmaceutical firm that develops small-molecule therapies to treat cancer and immune disorders. The firm recorded earnings per share of -$0.85 in Q4 2021, falling below estimates by $0.15. Quarterly revenue’s figure of $7.40 million was also below analysts’ forecasts by $5.80 million.

On January 28, Baird analyst Joel Beatty maintained an ‘Outperform’ rating on Nurix Therapeutics, Inc. shares, revising the firm’s price target to $41 from $49. The analyst noted that he views Nurix Therapeutics, Inc. as a leading protein modulation company, with four planned clinical readouts for mid-to-end 2022. The analyst explained the price target decrease as attributed to the recent broader pullback in biotech stocks.

7. Mynaric AG (NASDAQ:MYNA)

ARK Investment Management’s Stake Value: $5.00 million

Percentage of ARK Investment Management’s 13F Portfolio: 0.01%

Number of Hedge Fund Holders: N/A

Mynaric AG (NASDAQ:MYNA) is a firm specializing in laser communication technology, offering products used for aerospace applications. Its main products include CONDOR, an optical inter-satellite link flight terminal for satellite-to-satellite communications in space; and HAWK, an airborne flight terminal for air-to-air and air-to-ground links of airborne vehicles. Mynaric AG is headquartered in Germany. Cathie Wood added the firm to her portfolio in the fourth quarter, with 393,000 shares worth $5 million.

On December 7, Greg Konrad of research firm Jefferies initiated coverage of Mynaric AG with a ‘Buy’ rating and a price target of $23, noting that he expects the firm to grow at a compound annual growth rate (CAGR) of 100% over the next four years with high operating leverage. The analyst is bullish on laser communication terminals as a growing market supported by the increase in large satellite constellations.

Founded in 2009, Mynaric AG went public on the Frankfurt Stock Exchange in 2017 and debuted on the NASDAQ stock exchange in November 2021.

6. Hyperfine, Inc. (NASDAQ:HYPR)

ARK Investment Management’s Stake Value: $7.25 million

Percentage of ARK Investment Management’s 13F Portfolio: 0.02%

Number of Hedge Fund Holders: N/A

Cathie Wood also added Connecticut-based Hyperfine, Inc. (NASDAQ:HYPR) to her portfolio over the fourth quarter, with 1 million shares worth $7.25 million, representing 0.02% of her overall portfolio. The firm develops medical devices for diagnostics, and technology for non-invasive brain monitoring using a mix of hardware, software and applications powered by artificial intelligence.

Hyperfine, Inc. produced the world’s first portable MRI system called Swoop, which has been approved for use by the FDA in 2020. This new technology brings down the time process for an MRI scan by 94%, taking only 90 minutes for its workflow as compared to the 25.8 hour duration required for a conventional MRI machine scan.

With its products, Hyperfine, Inc. has identified the opportunity of an estimated $70 billion disruption across the key markets of Imaging, Sensing, and Guided Intervention.

Along with Tesla, Inc., Twitter, Inc., and Coinbase Global, Inc., Hyperfine, Inc. is a top stock in the portfolio of Cathie Wood.

5. Burning Rock Biotech Limited (NASDAQ:BNR)

ARK Investment Management’s Stake Value: $8.07 million

Percentage of ARK Investment Management’s 13F Portfolio: 0.02%

Number of Hedge Fund Holders: 11

Burning Rock Biotech Limited (NASDAQ:BNR) is a Chinese biopharmaceutical firm that offers cancer diagnostic tests for a range of cancer types and operates through the segments: Central Laboratory Business, In-Hospital Business, and Pharma Research and Development Services. Cathie Wood added the firm’s stock to her portfolio over the fourth quarter, with roughly 848,000 shares worth $8.07 million, representing 0.02% of her overall portfolio.

Investors were bullish on Burning Rock Biotech Limited at the close of the third quarter, with 11 hedge funds holding positions with a combined value of $52.5 million. This is in comparison to 9 hedge funds with $81.7 million worth of holdings in Burning Rock Biotech Limited in Q2 2021.

In December, Burning Rock Biotech Limited announced that it expects its revenue for 2021 to be around RMB500 million, or ‘slightly above’. Although Covid restrictions hampered overall growth, in-hospital testing volumes have grown, and central-lab testing volumes also recorded improvements, underpinned by a positive market response to two products: DetermaRx and myChoice.

4. Endeavor Group Holdings, Inc. (NYSE:EDR)

ARK Investment Management’s Stake Value: $15.45 million

Percentage of ARK Investment Management’s 13F Portfolio: 0.04%

Number of Hedge Fund Holders: 20

Endeavor Group Holdings, Inc. (NYSE:EDR) is a media, sports, and entertainment company that owns the rights to popular sports franchise UFC (Ultimate Fighting Championship), Pro Bull Riders, New York Fashion Week, and the Miami Open, along with other events.

Cathie Wood added Endeavor Group Holdings, Inc. to her portfolio in the fourth quarter, with approximately 443,000 shares valued at $15.45 million. With roughly 91 million shares worth $3.2 billion, Silver Lake Partners is the leading shareholder of Endeavor Group Holdings, Inc. at the end of the fourth quarter.

20 hedge funds were long Endeavor Group Holdings, Inc. at the close of the third quarter, with combined holdings worth $3.93 billion.

On December 15, Morgan Stanley analyst Benjamin Swinburne upgraded Endeavor Group Holdings, Inc. to ‘Overweight’ from ‘Equal Weight’, increasing the price target to $40 from $33. The analyst sees media’s “content spending surge” benefit companies such as Endeavor Group Holdings, Inc. which hold rights to exclusive content in entertainment and sports, especially as 70% of the company’s net operating income comes from UFC and its high-powered talent agency. As for the broader ‘media/entertainment’ sector, Swinburne sees growth in streaming, advertising and live entertainment leading to strong revenue growth in 2022.

ClearBridge Investments, an investment firm, talked about Endeavor Group Holdings, Inc. in its Q2 2021 investor letter. Here’s what the fund said:

“In addition to these disruptors, we added exposure in evolving opportunities through the IPO of Endeavor Group. Endeavor owns sports leagues like UFC and Pro Bull Riders which should benefit from the return of live events as well as leading sports agency IMG and its IMG Academy training franchise. Streaming companies are hungry for content and rights prices for programming owned by Endeavor are rising. Endeavor, as a representative to many of the world’s most well-known athletes, should also benefit from soaring sports salaries.”

3. XPeng Inc. (NYSE:XPEV)

ARK Investment Management’s Stake Value: $34.71 million

Percentage of ARK Investment Management’s 13F Portfolio: 0.1%

Number of Hedge Fund Holders: 25

XPeng Inc. (NYSE:XPEV) is a leading electric car-maker based in China. XPeng Inc. boasts industry-leading delivery speed for its electric vehicles, and new product launches planned in 2022 will allow the firm to expand its dominant growth in EV deliveries.  In December, XPeng Inc. sold 16,000 electric vehicles, signaling a 181% year-on-year increase. For 2022, XPeng Inc. gave unofficial guidance of 250,000 deliveries and a stretch goal of 300,000 deliveries. Given the company’s exceptional production capacity growth and supply chain strength, these estimates look credible even though they remain above analysts’ estimates.

Investors were eager on XPeng Inc. stock in the third quarter of 2021, with 25 hedge funds holding stakes worth $657.2 million. This is up from 19 hedge funds with holdings worth $784.6 million in XPeng Inc. at the close of Q2 2021.

On February 8, XPeng Inc. was given an ‘Overweight’ rating by Barclays analyst Jiong Shao, and a price target of $33. Initiating his coverage, the analyst sees EV’s among China’s top national priorities, with a ‘rare opportunity’ for EV makers like XPeng Inc. to not only command a dominant market share in China but the global market for electric vehicles.

2. Nu Holdings Ltd. (NYSE:NU)

ARK Investment Management’s Stake Value: $36.84 million

Percentage of ARK Investment Management’s 13F Portfolio: 0.11%

Number of Hedge Fund Holders: N/A

Cathie Wood added Nu Holdings Ltd. (NYSE:NU) to her portfolio over Q4 2021, with 3.92 million shares with a combined value of $36.84 million, which amounts to a 0.11% slice of her total holdings. The firm offers digital financial services in Brazil, Columbia, and Mexico, with 48.1 million customers across these markets. Nu Holdings Ltd. went public in December 2021 through a $2.6 billion IPO. Nu Holdings Ltd. is already disrupting traditional banks in Latin America, serving customers at considerably lower rates. It also enjoys backing from legendary investor and billionaire Warren Buffett.

On February 16, Nu Holdings Ltd. was initiated with an ‘Underperform’ rating and a $5 price target by Bradesco BBI analyst Gustavo Schroden. The analyst sees the fin-tech company facing near-term headwinds due to Brazil’s weak economic situation, and hurdles in monetizing its client base in the long term.

1. Nextdoor Holdings, Inc. (NYSE:KIND)

ARK Investment Management’s Stake Value: $44.34 million

Percentage of ARK Investment Management’s 13F Portfolio: 0.13%

Number of Hedge Fund Holders: N/A

Nextdoor Holdings, Inc. (NYSE:KIND) was the largest newcomer to Cathie Wood’s portfolio over the fourth quarter, with 5.6 million shares valued at $44.34 million, making up a 0.13% portion of her overall holdings. Nextdoor Holdings, Inc. is a social network company that allows users within a local neighborhood to interact, and exchange alerts and information.

On November 23, Evercore ISI analyst Mark Mahaney initiated coverage of Nextdoor Holdings, Inc. with an ‘Outperform’ rating and $16 price target. The analyst called Nextdoor “a true structural winner from the COVID crisis”, and sees the company as having one of the fastest revenue growth outlooks out of all the stocks he covers. Mahaney sees Nextdoor Holdings, Inc.’s (NYSE:KIND) ‘Social-Local’ theme offering a differentiated value proposition for both users and advertisers alike.

You can also take a peek at 15 Biggest Tech Companies In The World and Larry Robbins’ Top Stock Picks.

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