SQ, PYPL, MA, V: Digital Wallet Stocks on Watch Thanks to Cathie Wood

In a recent interview with CNBC, high-profile fund manager Cathie Wood sparked interest in digital wallet stocks.

A concept image of mobile payment with a smart phone for a cup of coffee.

Source: Shutterstock

Her commentary on this sector has sparked a surge of interest in companies offering digital wallets to their customers. Accordingly, it’s no surprise that the big players in this space are seeing nice gains today. Shares of Square (NYSE:SQ), PayPal (NASDAQ:PYPL), Visa (NYSE:V) and MasterCard (NYSE:MA) are all up approximately 2% on this news.

Now, these are all behemoths in the payments space, and digital wallets just make up a portion of each company’s respective overall business. However, it appears investors are flooding into large-cap stocks right now, as market share in the digital wallet space is increasingly viewed as a moat.

Indeed, the sheer size and growth potential of the aforementioned group prior to this vote of confidence was already strong. However, today, sentiment appears to be overly bullish.

Here’s more on what Cathie Wood had to say about digital wallet stocks, and why investors are getting so excited today.

Wood: Time to Get ‘Very Excited’ About Digital Wallet Stocks

Cathie Wood’s view on digital wallet stocks is one based on the core concept of disruption and innovation. Her ARKK ETF is one which has seen massive capital inflows this past year, as investors search for such emerging trends. Ms. Woods is increasingly being viewed as the stock picker with the golden touch when it comes to disruptive stocks. Accordingly, growth investors tend to listen closely to what she has to say.

Her view on companies offering digital wallets is that it’s a two-sided way to play the marketplace. Companies acting as intermediaries can target both the merchants and consumers, with long-term margin expansion potential via playing these two sides.

Additionally, Ms. Wood believes that the “old” way of banking is out. Millennials are changing in terms of their perception toward big banks, and want more digitally focused options for their payment solutions.

Indeed, it’s a solid thesis. Mobile banking has taken off, and big banks are innovating as fast as they can to catch up to the demand this segment is providing. For investors thinking long term, Ms. Wood suggests digital banking and genomics are two areas investors should focus on today.

On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article.


Article printed from InvestorPlace Media, https://investorplace.com/2021/04/sq-pypl-ma-v-digital-wallet-stocks-on-watch-thanks-to-cathie-wood-arkk-etf/.

©2021 InvestorPlace Media, LLC