Cathie Wood is the founder and CEO of Ark Invest, an asset management firm focusing on disruptive innovation, with approximately $14 billion in assets across six actively managed ETFs, two index ETFs, and a private equity fund. She gained recognition in 2020 when all six Ark ETFs posted over 100% returns, far outpacing the S&P 500’s 16% growth. 

However, after peaking in 2021, Ark’s funds experienced a significant decline, continuing through 2022. While 2023 has shown some recovery, the funds remain down double digits from their highs, with the flagship Ark Innovation Fund (ARKK) up 15% this year but still down 73% since February 2021.

Wood targets high-impact innovations like AI and blockchain, viewing them as key drivers of future economic growth. Her strategy emphasizes cost-cutting innovations that promote further advancements, as seen in Ark’s investment in Teladoc Health. Utilizing a dual research approach, Wood seeks a 15% annual return over five years, focusing on both market trends and company specifics.

Here are three stocks Wood has been owning for a while now that investors should watch out for.

Key Points About This Article:

• Cathie Wood is well regarded as one of the best growth investors of all time, but her stock picks have hit the mark in recent years as value stocks have performed increasingly well.
• That said, here are three of her stock picks that may actually be strong long-term bets for those looking to build a growth-oriented portfolio.
• If you’re looking for some stocks with huge potential, make sure to grab a free copy of our brand-new “The Next NVIDIA” report. It features a software stock we’re confident has 10X potential.

Block (SQ)

Block (NYSE:SQ) operates through two main ecosystems: Square and Cash App. The Square ecosystem integrates hardware, software, and banking services, offering a seamless experience for merchants. Cash App allows users to manage their finances in one place, simplifying consumer finance, which has contributed to its popularity as the most downloaded financial app in the U.S.

In September 2020, Ark Invest predicted Block’s stock would reach $375 per share by 2025, suggesting a 150% upside. Despite a 50% drop in Block’s stock to $62, the new target indicates a 505% potential increase. Wood remains bullish on Block, which currently represents 5.4% of Ark’s portfolio, down from 5.6% when it was the fifth-largest position.

With a stake valued at $2.68 billion, 59 hedge funds tracked by Insider Monkey held positions in Block during Q2, with ARK Investment Management being the largest shareholder at $534.783 million. Recently, Block has shifted its focus from revenue growth to improving profitability, aiming to meet the “Rule of 40” by 2026, ensuring revenue growth and profit margin together total at least 40%.

CRIPSR Therapeutics (CRSP)

Valuing small biotech firms with minimal revenue is challenging, yet CRISPR Therapeutics (NASDAQ:CRSP) appears undervalued at a $4.2 billion market cap. Following the approval of Casgevy, a $2.2 million treatment for blood disorders developed with Vertex Pharmaceuticals, the company sees significant potential. They estimate a market of 35,000 patients in the U.S. and Europe, plus 23,000 in parts of the Middle East, which could yield over $1 billion in sales. CRISPR’s gene-editing platform has shown promise in addressing unmet medical needs, including a potential functional cure for type 1 diabetes.

CRISPR Therapeutics holds the second-largest position in Cathie Wood’s Ark Genomic Revolution ETF, making it a significant investment. Despite a 47% decline over three years, the launch of its first product, Casgevy, for blood disorders may signal a good entry point. Additionally, with over $2 billion in cash, CRISPR Therapeutics is well-positioned to progress its promising pipeline.

Management estimates that over 166,000 people could benefit from Casgevy, contingent on streamlining treatment processes. As of mid-July, only 20 patients had begun treatment, leaving the target market largely untapped. Analysts project CRISPR Therapeutics will generate nearly $50 million in revenue this year, with expectations of over $288 million next year. This estimate only accounts for current patients, with ongoing R&D aimed at expanding the addressable market still in early stages.

Shopify (SHOP)

Wood focuses on investing in disruptive technology stocks, targeting both established names and emerging players. Her forward-thinking strategy often contrasts with market sentiment. Shopify (NYSE:SHOP), for example, empowers e-commerce retailers by offering diverse solutions without selling its own products, positioning it as a retail disruptor. 

Shopify aims for growth, reporting a 30% increase in international merchants in Q2. The company is launching new features to enhance its e-commerce platform. Most revenue comes from payment processing, which impacts earnings when transaction volumes decline. Cathie Wood may buy more shares, anticipating lower interest rates will boost Shopify’s stock, which is down 4% this year.

Moreover, Shopify is creating a comprehensive operating system for businesses, poised for growth in the global e-commerce market. In Q2, the company’s adjusted revenue increased 25%, driven by a 27% rise in subscription solutions. With a gross payments volume of $41 billion, Shopify aims to capture significant market share and deliver strong returns for investors.

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