In this article, we will be taking a look at the top 12 from Cathie Wood’s Q2 portfolio.
This August on Bloomberg ETF IQ, ARK Investment Management’s Cathie Wood commented that the Federal Reserve shouldn’t be expected to start cutting interest rates any sooner than 2023. Wood stated that the U.S. economy is currently in a weak place, bringing the market into a deep recession that will have to be dealt with by the Fed in the coming quarters. On the topic of her firm’s movements in such a market downturn, Wood stated that ARK Investment will continue to invest in “innovation”, a move that has led her to invest in companies she views as being poised to thrive in difficult times.
This belief in innovation has led Wood to invest billions into companies such as Tesla, Inc. (NASDAQ:TSLA), Shopify Inc. (NYSE:SHOP), and NVIDIA Corporation (NASDAQ:NVDA). While many view some of her investments as unprofitable, her flagship fund has nonetheless captured the attention of investors. According to Bloomberg in June, the Ark Innovation ETF posted its longest streak of inflows during that month in more than a year. About $639 million was invested into the $9.5 billion ETF over an eight-day span.
The continued stream of cash poured into Wood’s flagship fund signifies the conviction investors hold in Wood’s investment history and strategy. The Ark Innovation ETF rose by 14% this June, and continues to survive in a high-inflation environment. Many investors and ETF issuers now continue to support and follow Wood, in light of her investment returns and success. Let’s now take a look at the top 12 stocks from Cathie Wood’s Q2 portfolio.
Cathie Wood of ARK Investment Management
Our Methodology
We have selected the first 12 stocks listed in Cathie Wood’s 13F holdings as of the close of the second quarter, according to Insider Monkey’s data. These stocks have mostly positive analyst ratings, and price targets showing upside potential. They are ranked on the basis of Wood’s stake in them, from the lowest to the highest in value. We’ve listed the stocks’ popularity among the 895 hedge funds tracked by Insider Monkey that filed 13Fs for the second quarter.
Top 12 From Cathie Wood’s Q2 Portfolio
12. Intellia Therapeutics, Inc. (NASDAQ:NTLA)
ARK Investment’s Stake Value: $439,003,000
Percentage of ARK Investment’s 13F Portfolio: 2.59%
Number of Hedge Fund Holders: 27
Intellia Therapeutics, Inc. (NASDAQ:NTLA) is a biotech company working to develop therapeutics. The company has several programs operating to cure conditions like transthyretin amyloidosis and hereditary angioedema.
An ‘Overweight’ rating was reiterated on shares of Intellia Therapeutics, Inc. (NASDAQ:NTLA) on August 4 by Swapnil Malekar at Piper Sandler. The analyst also placed a $163 price target on the stock. This June, Intellia Therapeutics, Inc. (NASDAQ:NTLA) was upgraded to ‘Buy’ by BofA analyst Greg Harrison because of the company’s lead programs and gene editing technology. The analyst projected sales of about $3.5 billion in 2030.
In 2021, Intellia Therapeutics, Inc. (NASDAQ:NTLA) demonstrated that its product, NTLA-2001, was able to edit liver cells genetically. This marked a major scientific achievement.
There were 27 hedge funds long Intellia Therapeutics, Inc. (NASDAQ:NTLA) in the second quarter, with a total stake value of $852 million. ARK Investment Management was the largest stakeholder in the company, holding 9.51 million shares worth over $439 million.
Intellia Therapeutics, Inc. (NASDAQ:NTLA), like Tesla, Inc. (NASDAQ:TSLA), Shopify Inc. (NYSE:SHOP), and NVIDIA Corporation (NASDAQ:NVDA), is among Wood’s top stock picks so far in 2022.
11. Shopify Inc. (NYSE:SHOP)
ARK Investment’s Stake Value: $455,203,000
Percentage of ARK Investment’s 13F Portfolio: 2.69%
Number of Hedge Fund Holders: 60
Shopify Inc. (NYSE:SHOP) is an IT and commerce company. Its commerce platform and services are available in Canada, the U.S., Europe, the Middle East, Africa, the Asia Pacific, and Latin America.
Atlantic Equities analyst Kunaal Malde upgraded Shopify Inc. (NYSE:SHOP) shares from ‘Neutral’ to ‘Overweight’ on August 11. Malde also placed a $46 price target on the stock.
The company’s revenue in the second quarter was $1.3 billion, up 15.7% year-over-year and beating the previous quarter’s $1.2 billion revenue. Shopify Inc.’s (NYSE:SHOP) EPS is also expected to grow by 41% over the next three-to-five years.
Out of 895 hedge funds, 60 were long Shopify Inc. (NYSE:SHOP) in the second quarter, while 72 were long the stock in the previous quarter. Their total stake values were $3.3 billion and $5.8 billion respectively.
10. CRISPR Therapeutics AG (NASDAQ:CRSP)
ARK Investment’s Stake Value: $564,683,000
Percentage of ARK Investment’s 13F Portfolio: 3.33%
Number of Hedge Fund Holders: 25
CRISPR Therapeutics AG (NASDAQ:CRSP) is a gene-editing company that develops gene-based medicines for diseases. The company’s technology allows for precise directed changes to genomic DNA.
Edward Tenthoff at Piper Sandler holds an ‘Overweight’ rating on CRISPR Therapeutics AG (NASDAQ:CRSP) shares as of August 17. The analyst also has a $121 price target on the stock. This August, Tenthoff noted that the FDA’s approval of bluebird bio’s Zynteglo, a treatment for beta-thalassemia, may indicate positive news for CRISPR Therapeutics AG’s (NASDAQ:CRSP) exa-cel treatment. Analyst Benjamin Burnett at Stifel is also optimistic about the likelihood of exa-cel getting FDA approval.
Cathie Wood has recently increased her stake in several stocks like Tesla, Inc. (NASDAQ:TSLA), Shopify Inc. (NYSE:SHOP), NVIDIA Corporation (NASDAQ:NVDA), and CRISPR Therapeutics AG (NASDAQ:CRSP). The latter was held by 25 hedge funds in the second quarter, with their total stake value being $724 million.
9. Twilio Inc. (NYSE:TWLO)
ARK Investment’s Stake Value: $586,053,000
Percentage of ARK Investment’s 13F Portfolio: 3.46%
Number of Hedge Fund Holders: 64
Twilio Inc. (NYSE:TWLO) is an IT company providing a cloud communications platform. The company’s platform allows developers to build, scale, and operate customer engagement in software applications in the U.S. and internationally.
JMP Securities analyst Patrick Walravens holds an ‘Outperform’ rating on Twilio Inc. (NYSE:TWLO) shares as of August 5 and has a $175 price target on them.
In the second quarter, Twilio Inc. (NYSE:TWLO) suffered an EPS loss of $0.11, beating estimates by $0.09. The company’s revenue was $943 million, also beating estimates by $22.4 million. Twilio Inc. (NYSE:TWLO) has an expected EPS growth rate of 30% over the next three-to-five years.
Our hedge fund data shows 64 hedge funds long Twilio Inc. (NYSE:TWLO) in the second quarter, down from 75 hedge funds long the stock in the previous quarter. Their total stake values were $2.1 billion and $3.3 billion respectively.
Carillon Tower Advisers, an investment management firm, mentioned Twilio Inc. (NYSE:TWLO) in its first quarter 2022 investor letter. Here’s what it said:
“Twilio (NYSE:TWLO), the messaging and marketing automation software platform, sold off along with other highly valued software-as-a-service providers. Although the company management team expects continued strong growth, investors have grown concerned that demand could slow following the surge in digital communication during the pandemic.”
8. UiPath Inc. (NYSE:PATH)
ARK Investment’s Stake Value: $641,751,000
Percentage of ARK Investment’s 13F Portfolio: 3.79%
Number of Hedge Fund Holders: 24
UiPath Inc. (NYSE:PATH) is a systems software company offering an end-to-end automation platform. The company works to provide a range of robotic process automation solutions in the U.S., Romania, and Japan.
Kingsley Crane at Canaccord assumed coverage of UiPath Inc. (NYSE:PATH) shares on July 7 with a ‘Buy’ rating. The analyst also placed a $25 price target on the stock.
This June, UiPath Inc. (NYSE:PATH) raised its non-GAAP operating income guidance for 2023. The company sees revenue of $229 million to $231 million in the second quarter of next year. UiPath Inc. (NYSE:PATH) sees non-GAAP operating income for the next year to be about $15 million.
ARK Investment Management was the largest stakeholder in UiPath Inc. (NYSE:PATH) as of the close of the second quarter, out of a total of 24 hedge funds long the stock. Wood’s fund held 37.6 million shares worth over $641 million, nearly half hedge funds’ total stake value of $1.3 billion.
7. Teladoc Health, Inc (NYSE:TDOC)
ARK Investment’s Stake Value: $691,821,000
Percentage of ARK Investment’s 13F Portfolio: 4.09%
Number of Hedge Fund Holders: 32
Teladoc Health, Inc (NYSE:TDOC) is a healthcare technology company providing virtual healthcare services in the U.S. and internationally. The company’s portfolio of services and solutions covers non-urgent, episodic, chronic, and complicated medical conditions.
DA Davidson analyst Robert Simmons initiated coverage of Teladoc Health, Inc (NYSE:TDOC) shares with a ‘Buy’ rating on August 11. The analyst also placed a $45 price target on the stock.
Teladoc Health, Inc’s (NYSE:TDOC) EPS loss in the second quarter was $0.44, beating estimates by $0.27. The company’s revenue was $592 million, also beating estimates, by $5.1 million.
As of the close of the second quarter, 32 hedge funds were long Teladoc Health, Inc (NYSE:TDOC), with a total stake value of $1.2 billion. In the previous quarter, 36 hedge funds were long the stock with a total stake value of $1.9 billion.
6. Coinbase Global, Inc. (NASDAQ:COIN)
ARK Investment’s Stake Value: $699,091,000
Percentage of ARK Investment’s 13F Portfolio: 4.13%
Number of Hedge Fund Holders: 29
Coinbase Global, Inc. (NASDAQ:COIN) is a crypto company offering financial infrastructure and technology for the crypto economy in the U.S. and globally. The company provides retailers with a primary financial footprint in the U.S. crypto economy.
A ‘Neutral’ rating was placed on Coinbase Global, Inc. (NASDAQ:COIN) on August 17 by JPMorgan’s Kenneth Worthington. The analyst also has a $64 price target on the shares. Worthington noted that Coinbase Global, Inc. (NASDAQ:COIN) will benefit immensely from the Ethereum Merge. Since Coinbase Global, Inc. (NASDAQ:COIN) is the largest crypto exchange in the U.S., based on daily trading volume, the company’s market share of ether assets is also significantly large, standing at 15%. The Ethereum merger will be an opportunity for the company to grow its revenue.
There were 29 hedge funds long Coinbase Global, Inc. (NASDAQ:COIN) in the second quarter, of which ARK Investment Management was the largest stakeholder. The total value of hedge funds’ positions in COIN was $1.2 billion, while Wood’s fund held 8.95 million shares in the company, worth over $699 million.
Just like Tesla, Inc. (NASDAQ:TSLA), Shopify Inc. (NYSE:SHOP), and NVIDIA Corporation (NASDAQ:NVDA), Coinbase Global, Inc. (NASDAQ:COIN) is an innovative company that Cathie Wood thinks highly of.
Hayden Capital, an investment management firm, mentioned Coinbase Global, Inc. (NASDAQ:COIN) in its second quarter 2022 investor letter. Here’s what the firm said:
“Coinbase (NASDAQ:COIN): The crypto ecosystem moves extremely quickly, and there’s been many new developments since we first invested in Coinbase, a year ago. Most notably, crypto market cap has declined from a peak of ~$3 Trillion last fall, to ~$1.1 Trillion today (a -63% decline, and -72% peak-to-trough; LINK). Crypto is a volatile asset class, and has experienced many draw-downs of similar magnitude in the past. For example, Bitcoin was down -93% during 2011, -85% from 2013-15, and -84% from 2017-18. In this context, the latest draw-down is a pretty normal outcome for this emerging asset class.
A large reason for this volatility, is simply because there aren’t any major “real-world use cases” for the asset just yet. In our letter outlining the investment last year, we wrote that crypto is still “in the middle of ‘crossing the chasm’ into mainstream adoption & use cases, which will result in millions of mainstream users needing to transact crypto in some form”…” (Click here to see the full text)
5. EXACT Sciences Corporation (NASDAQ:EXAS)
ARK Investment’s Stake Value: $745,744,000
Percentage of ARK Investment’s 13F Portfolio: 4.41%
Number of Hedge Fund Holders: 28
EXACT Sciences Corporation (NASDAQ:EXAS) is a biotech company providing cancer screening and diagnostic test products. The company operates in the U.S. and internationally.
An ‘Outperform’ rating was reiterated on EXACT Sciences Corporation (NASDAQ:EXAS) shares on August 28, by Dan Leonard at Credit Suisse. The analyst also has a $55 price target on the stock.
During the second quarter, EXACT Sciences Corporation (NASDAQ:EXAS) had an EPS loss of $0.94, beating estimates by $0.13. The company’s revenue was $522 million, also beating estimates by $25.5 million.
Out of 895 hedge funds tracked that filed 13Fs for the second quarter, 28 funds were long EXACT Sciences Corporation (NASDAQ:EXAS) with a total stake value of $1.1 billion.
RiverPark Funds, an investment management firm, mentioned EXACT Sciences Corporation (NASDAQ:EXAS) in its third quarter 2021 investor letter. Here’s what the firm said:
“Exact Sciences: EXAS shares declined on a disappointing recovery in Cologuard screening due to COVID. Despite continued revenue growth from Precision Oncology and COVID testing, and Cologuard screening revenue growth of 30%, COVID restrictions limited access to physicians’ offices for the company’s and its Pfizer Joint Venture sales force as well as causing a severe drop off of in-person wellness visits.
In the last year, Exact has also pivoted the company significantly from its single cancer screening tests (Cologuard for colon cancer and Oncotype for breast cancer) to multi-cancer screening through its Thrive acquisition, and to minimal residual disease and recurrence monitoring through its Ashion and Tardis acquisitions. Through this pivot, Exact has tripled its market opportunity from $20 billion to $60 billion.”
4. Block, Inc. (NYSE:SQ)
ARK Investment’s Stake Value: $799,455,000
Percentage of ARK Investment’s 13F Portfolio: 4.72%
Number of Hedge Fund Holders: 72
Block, Inc. (NYSE:SQ) is an IT company working to create tools that enable sellers to accept card payments. The company also offers reporting and analytics, alongside next-day settlement services.
Mizuho’s Dan Dolev reiterated a ‘Buy’ rating on Block, Inc. (NYSE:SQ) shares on August 8 and has a $135 price target on the stock.
The company’s second quarter EPS was $0.18, beating estimates by $0.01. Block, Inc. (NYSE:SQ) had revenue of $4.4 billion, also beating estimates by $69.5 million. Over the next three-to-five years, the company’s EPS is expected to grow by 12.5%.
There were 72 hedge funds long Block, Inc. (NYSE:SQ) in the second quarter, and 84 hedge funds long the stock in the previous quarter. Their total stake values were $3.5 billion and $6.2 billion respectively.
3۔ Roku, Inc. (NASDAQ:ROKU)
ARK Investment’s Stake Value: $962,719,000
Percentage of ARK Investment’s 13F Portfolio: 5.69%
Number of Hedge Fund Holders: 34
Roku, Inc. (NASDAQ:ROKU) is a TV streaming platform operator. The company operates through its Platform and Player segments.
Matthew Thornton at Truist holds a ‘Buy’ rating on Roku, Inc. (NASDAQ:ROKU) shares as of August 28. The analyst also holds a $90 price target on the stock.
At the start of August, Roku, Inc. (NASDAQ:ROKU) was among the communication stocks on the upside among various S&P 500 sectors. The company rebounded in the first week of August with a 25.6% gain.
Roku, Inc. (NASDAQ:ROKU) was in 34 hedge funds’ portfolios in the second quarter, with their total stake value being $1.4 billion.
2. Zoom Video Communications, Inc. (NASDAQ:ZM)
ARK Investment’s Stake Value: $1,028,943,000
Percentage of ARK Investment’s 13F Portfolio: 6.08%
Number of Hedge Fund Holders: 44
Zoom Video Communications, Inc. (NASDAQ:ZM) is an application software company providing a unified communications platform. The company offers its products and services in the Americas, the Asia Pacific, Europe, the Middle East, and Africa.
A ‘Buy’ rating was noted on Zoom Video Communications, Inc. (NASDAQ:ZM) on August 28 by analyst Catharine Trebnick at MKM Partners. The analyst also placed a $125 price target on the stock.
Zoom Video Communications, Inc. (NASDAQ:ZM) had EPS of $1.05 in the second quarter of 2023, beating estimates by $0.11. The company’s revenue was $1.1 billion, up 7.6% year-over-year. Over the next three-to-five years, Zoom Video Communications, Inc.’s (NASDAQ:ZM) EPS is expected to rise by 14%.
Our hedge fund data shows 44 hedge funds long Zoom Video Communications, Inc. (NASDAQ:ZM) in the second quarter. Their total stake value was $2.9 billion.
Horos Asset Management, an investment management firm, mentioned Zoom Video Communications, Inc. (NASDAQ:ZM) in its first quarter 2022 investor letter. Here’s what the firm said:
“What about the other asset class that has attracted the most attention from the investment community in recent times? Here we can distinguish three major groups. First, those companies without earnings that had convinced investors of their great future growth prospects, pushing up their valuations to irrational levels. A clear example of this, which we mentioned almost two years ago (see here) is Zoom Video Communications (“Zoom”), whose market cap exceeded that of companies such as IBM or came close to that of Cisco Systems. Well, from the time we wrote about this odd situation until today, Zoom shares have collapsed nearly 80%.
Therefore, if interest rates rise (or are expected to rise), company valuations are negatively impacted. This is especially true for those businesses that generate little cash today and the market expects them to generate a lot of cash in the future. Hence the severe losses in companies that promised a lot of cash generation in the future (such as Zoom).”
1. Tesla, Inc. (NASDAQ:TSLA)
ARK Investment’s Stake Value: $1,094,679,000
Percentage of ARK Investment’s 13F Portfolio: 6.47%
Number of Hedge Fund Holders: 72
Tesla, Inc. (NASDAQ:TSLA) is an electric vehicle manufacturing company. It manufactures EVs and energy generation and storage systems for the U.S., China, and international markets.
Philippe Houchois at Jefferies holds a ‘Buy’ rating on Tesla, Inc. (NASDAQ:TSLA) shares as of August 26. The analyst also adjusted his price target on the stock to $350.
In the second quarter, Tesla, Inc. (NASDAQ:TSLA) had EPS of $0.76, beating estimates by $0.16. The company’s revenue was $16.9 billion, essentially in line with estimates. Tesla, Inc.’s (NASDAQ:TSLA) EPS is expected to grow by about 44.6% over the next three-to-five years.
Tesla, Inc. (NASDAQ:TSLA) was found in the 13F portfolios of 72 of the hedge funds tracked by Insider Monkey as of June 30, with their total stake value amounting to $7.2 billion.
Baron Funds, an asset management firm, mentioned Tesla, Inc. (NASDAQ:TSLA) in its second quarter 2022 investor letter. Here’s what it said:
“In 2014, before we began to invest in Tesla (NASDAQ:TSLA), I called Roger to ask whether he thought Elon Musk’s electric car business would succeed. I did not believe that Roger, an owner of dealerships that sell cars powered by internal combustion engines (ICE) would likely have a favorable opinion of Tesla’s prospects. That was principally for two reasons:
- First, automobile manufacturing and distribution is unusually complicated, capital intensive, and highly regulated, which makes profitability problematic;
- second, cars with ICE motors require extensive annual maintenance, and dealer services revenues, not profits from automobile sales, are the most important contributor to profits of perpetual licensed ICE car dealerships.
Penske Automotive Group is principally an ICE car dealer. Since electric cars are powered by batteries and need little service, franchised dealerships are incented to sell ICE not EV automobiles. Further, Roger had been a long-term director of General Motors. General Motors’ ICE automobile business would be disrupted if Tesla were successful.
Regardless, I was right to have spoken with Roger. That was since he outlined numerous issues we needed to consider, study, and question before we determined whether we believed Tesla could be a successful business…before we ultimately chose whether to invest in that company.
When we completed our initial due diligence on Tesla, which diligence has been ongoing since 2014, we decided to invest $360 million in Tesla over the next two years. I then called Roger and outlined why I thought we could earn 20 times our capital over the next 10 years. Roger was so certain I was wrong that he offered to bet me $1 million that Tesla would fail. “Roger, I can’t bet you a million dollars. First, if you are right, I couldn’t afford to pay you. Second, if I’m right, you’re my friend, and I couldn’t take your money.” We settled on a dinner bet…”
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Disclosure: None. Top 12 From Cathie Wood’s Q2 Portfolio is originally published on Insider Monkey.
