Known for her appetite for relatively risky tech-based stocks, Cathie Wood has become an icon on Wall Street. The founder of ARK Investment Management, Wood has accumulated a net worth of $220 million and built a reputation owing to her knack for identifying high-potential innovation-focused stocks.
Wood was recognized as Wall Street’s best stock picker of 2020 after masterminding the market’s post-pandemic recovery, and her bravery in picking undervalued stocks with plenty of room for growth has seen the ARK CEO become a key influencer for retail investors with a high-risk appetite.
As for ARK, the investment management firm has amassed $6.71 billion in assets under management (AUM) and will be readying for a market rally in the second half of 2024 and 2025 as the prospect of Federal Reserve rate cuts becomes a reality.
With Cathie Wood remaining a long-time supporter of cryptocurrency, the expectation of a market rally in the wake of Bitcoin’s halving event in April 2024 is likely also to shape ARK’s performance for the months ahead. With this in mind, let’s take a look at three of Wood’s biggest Wall Street bets among her top stock picks.
Coinbase (COIN)
When it comes to stocks with high growth potential on Wall Street, cryptocurrency firms stand among the best market prospects. At the pinnacle of crypto stock market listings is Coinbase (NASDAQ:COIN), a cryptocurrency exchange that has moved closely alongside Bitcoin in terms of price movements.
In February, Cathie Wood claimed that Coinbase was “executing brilliantly,” while highlighting that the exchange remains the most compliant option throughout the crypto industry.
While recent surges in the value of Bitcoin have seen ARK sell off some of its COIN holdings, the stock remains one of the biggest in the investment firm’s portfolio with a 7.8% share.
Because Coinbase moves alongside the price rallies of Bitcoin and wider cryptocurrency bull markets, there is much hope for the stock over the coming months due to Bitcoin’s recent halving event, which has historically paved the way for sustained bull runs and fresh all-time high values for the crypto asset.
It’s widely hoped that a future cryptocurrency bull run will directly influence the growth of COIN in late 2024 and 2025.
Aside from its crypto connotations, Coinbase is a highly innovative platform that has recently introduced its own smart wallet technology to help cryptocurrency holders navigate the complex and sprawling world of blockchain.
Tesla (TSLA)
Ahead of Coinbase is another innovation-focused stock in Tesla (NASDAQ:TSLA), which accounts for 8.1% of ARK’s total AUM.
Although ARK has been selling Coinbase stock in recent months due to the relatively strong performance of the cryptocurrency market, Cathie Wood has remained laser-focused on the long-term prospects of Tesla and recently predicted that the stock will grow an astonishing 1,350% in the five years leading up to 2029.
Tesla has been struggling on Wall Street of late, owing to the tumultuous leadership of Elon Musk, and has recorded a 20% decline over the first two quarters of 2024. However, Wood’s belief in the potential of TSLA indicates that its recent decline could offer a strong buying opportunity for investors with sufficient risk appetite.
Robinhood (HOOD)
Another cryptocurrency-focused stock that Cathie Wood has remained a long-term supporter of is Robinhood (NASDAQ:HOOD).
Although the retail investor exchange platform only represents 4.7% of ARK Invest’s AUM at the time of writing, HOOD has undergone significant growth of 78% in the first half of 2024 and has more than doubled in value since the beginning of Q3 2023.
This illustrates the strength of the stock’s ability to bounce back from its lows following a series of bad press in the wake of the meme stock frenzy, which saw retail investors become frustrated by Robinhood suspending trading on stocks like GameStop.
Wall Street analysts have supported Wood’s assertion that Robinhood is ripe for growth, and Wolfe Research analyst Steven Chubak recently upgraded the stock from Peer Perform to Outperform.
Much like Coinbase, Robinhood’s exposure to the cryptocurrency landscape means that the stock could be in line for a period of strong performance should Bitcoin undergo its post-halving rally, as some analysts anticipate, over the course of the next 12 months.
On the date of publication, Dmytro Spilka 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.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.