Cathie Wood had a rough few years. Her flagship fund, the ARK Innovation ETF (NYSEARCA:ARKK), hit an all-time high of $156 in 2021 before crashing back to Earth. The ETF is down 70% since then, and many of her other actively-managed ETFs suffered the same fate. Today, the same investors championing Cathie Wood’s stock picks in 2021 are laughing at her bench of seemingly-overvalued stocks with limited prospects. This has led to the rise of Cathie Wood stocks you can’t afford to miss.
But it isn’t Cathie’s fault. The ARK ETF series emerged amid a perfect storm that benefited growth companies within her roster: low-interest rates, increased digitization, SPAC-mania, and a ballooning retail investor sector.
Still, despite Cathie Wood’s funds falling from grace, some of her best picks remain undervalued. These undervalued stocks represent her favorite themes: artificial intelligence, electric vehicles, and genomics.
Palantir Technologies (PLTR)
It’s somewhat inaccurate to call Palantir Technologies (NYSE:PLTR) undervalued, but the company has the strongest growth potential among most of Wood’s AI and machine learning picks. Analysts agree, and Wedbush’s Dan Ives recently called the stock the “Messi of AI.” A strong endorsement, indeed!
Ives’ endorsement echoes Cathie Wood’s sentiment. In the same interview, Ives indicated that Palantir is currently on a trajectory to capitalize on what he sees as a potential $1 trillion market opportunity. He also remarked that the full potential of this trajectory is yet to be acknowledged by investors. This observation is noteworthy, especially given AI enthusiasts’ already-established interest in Palantir. This make it one of those Cathie Wood stocks to buy.
Notably, Palantir’s involvement in the AI sector spans over two decades, during which they discreetly secured contracts with government and corporate entities. The company only garnered widespread attention in 2020. This extensive history highlights that Palantir’s growth isn’t merely a byproduct of the current AI trend; it has been an integral component of the expanding industry for years.
General Motors (GM)
Cathie Wood loves the electric vehicle industry, and General Motors (NYSE:GM) is one of the few undervalued companies in the industry. Ranking as the U.S.’s second-largest EV manufacturer, GM is set to expand its portfolio. In 2023, this expansion will see the addition of the Silverado EV, Blazer EV, and, later, the Equinox EV.
With a revenue projection of $225 billion by 2025, GM anticipates that its EV segment will contribute at least $50 billion. Given its trajectory, GM is poised to become a significant player in the global EV market shortly. The company’s strategy leverages economies of scale and decreasing battery expenses to boost EV profitability.
Furthermore, GM’s financial foundation is robust. With $28.2 billion in liquid assets and reduced debts, it has the financial strength to support its daily operations and future growth endeavors. All in all, it’s one of those ptoent Cathie Wood stocks.
In essence, GM embodies the attributes of an ideal value investment. The company is a leading player in a focused industry, laden with growth prospects and an appealing market valuation.
Crispr Therapeutics (CRSP)
Cathie Wood has an entire ETF dedicated to genomics, the ARK Genomic Revolution ETF (BATS:ARKG). But, practically speaking, she could have solely invested in Crispr Therapeutics (NASDAQ:CRSP) and called it a day.
The company is the only clinical-stage product in the realm of gene editing. The company uses cutting-edge CRISPR technology to alter and correct DNA to remedy genetic ailments and abnormalities. While the technology remains in its developmental stages and has yet to penetrate the market, many (correctly) label Crispr a risky play. But those views may prove shortsighted, as Crispr is positioned to become a global biotech titan in the coming years.
Practically, the uncertainty clouding Crispr isn’t inherently linked to its foundational technology or operational vision. Instead, the wariness comes from potential regulatory roadblocks. Crispr is at the cutting edge as the only gene editing firm on the brink of market entry. As the first-to-market, there’s limited historical reference or context to gauge how regulatory bodies might navigate gene editing outcomes.
Still, for those with an eye on the future trajectory of healthcare, Crispr undeniably merits attention. The company is also a rare winner amid biotech firms, having recently beat analyst earnings estimates by more than 50%. Prospects and fundamental positioning make this gene-editing giant undervalued when considering long-term potential.
On the date of publication, Jeremy Flint held a long position in PLTR and GM. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
