Love or hate her, there’s no denying the influence Cathie Wood still has on the investment community. Known for populating the exchange-traded funds (ETFs) she operates with disruptive technology companies and fledgling start-ups, Wood has experienced both boom and bust over the last few years. During the Covid-19 rally of 2020 and 2021, Wood was hailed as a genius as her flagship ETF gained over 300%. But then the bubble burst and the bear market of 2022 took hold. Wood’s main fund gave up all the gains it had achieved during the pandemic and plunged 80% peak to trough. Critics circled, claiming that Wood was a reckless investor who destroyed wealth with risky bets on stocks of unproven companies.
Through it all, Wood has remained defiant and stuck to her core investing focus of allocating capital to innovative companies that are either disrupting traditional industries or blazing new paths. This year, Wood’s company, Ark Invest, is doing much better, with the flagship fund up 41% since the first trading day in January. Here are three Cathie Wood stocks that should be on every investor’s radar this fall.
Tesla (TSLA)
Cathie Wood’s biggest holding in her flagship ARK Innovation ETF (NYSEARCA:ARKK) continues to be electric vehicle maker Tesla (NASDAQ:TSLA). The company led by the mercurial Elon Musk continues to be a rollercoaster for shareholders. While TSLA stock has gained 154% so far in 2023, it is currently trading 11% lower than it was 12 months ago due to a big selloff in the autumn of 2022 after Musk bought Twitter (NYSE:TWTR). That’s because concerns arose regarding his ability to allot proper attention to his new company and Tesla.
More recently, TSLA stock shed 27% in August after second-quarter financial results were made public. The Q2 print raised concerns about lower profit margins due to aggressive price cuts and other incentives being offered on Tesla vehicles around the world. However, since the end of August, Tesla’s shares have rallied, rising 27% as analysts turn bullish on the company’s efforts at diversification. That includes the creation of a new supercomputer called Dojo. In the long term, Tesla continues to be a winner, having risen 1,276% in the last five years.
Shopify (SHOP)
Another of Cathie Wood’s top 10 holdings is the e-commerce company Shopify (NYSE:SHOP). A darling of the pandemic when merchants and small businesses were forced to move their operations completely online, Shopify has endured a comeuppance since the market peaked in November 2021. SHOP stock is down 63% from its pandemic peak. However, like Tesla, it has rallied this year, having increased 75% since January amid the current rebound in tech.
Shopify most recently reported a Q2 net loss of $1.3 billion, 8% greater than the net loss of $1.2 billion it booked a year earlier. The company attributed the poor result to restructuring costs after it laid off 20% of its workforce and sold its logistics business called Flexport earlier this year. While the Q2 print rattled some investors, Shopify appears to be bouncing back. SHOP stock recently jumped 10% after the company announced a deal to offer rival Amazon’s (NASDAQ:AMZN) Buy with Prime program to its own merchants.
DraftKings (DKNG)
NFL football is back and online sports betting company DraftKings (NASDAQ:DKNG) is making hay while the sun shines. DKNG stock has been on a tear this year, enjoying a bull run in its share price typically seen in mega-cap tech stocks. Year to date, DraftKings’ share price rose 180%. The growth has been fueled by the explosion of sports betting and online gambling in the U.S., as well as DraftKings’ sizable share of that market.
Revenue generated from online sports betting is forecast to reach $7.62 billion this year. Also, DraftKings now controls 32% of the market in the U.S., up from about 27% just a year ago. The company is aggressively expanding its presence as a growing number of U.S. states legalize sports betting and gambling. The market for the activity is expected to get only bigger in the coming years, as jurisdictions around the world legalize the once-taboo practice. Cathie Wood clearly sees an opportunity, as DKNG stock is one of her top holdings.
On the date of publication, Joel Baglole did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
