Several factors have contributed to Cathie Wood's success, but one of the most important is her mindset. Rather than placing short-term price targets on equities or attempting to time the market, Wood's asset management firm (ARK Invest) seeks out innovative businesses that make good long-term holdings.

To that end, ARK recently bought shares of MercadoLibre (NASDAQ:MELI) and UiPath (NYSE:PATH). Both of these disruptive tech companies have great potential, but do they belong in your portfolio? Let's take a look.

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1. MercadoLibre

MercadoLibre operates the leading online marketplace and digital payments ecosystem in in Latin America. Its platform serves 70 million active users across 18 countries, including Brazil, Argentina, and Mexico, the three largest markets in the region by gross domestic product.

To supplement its commerce business, MercadoLibre also offers advertising, financing, and logistics support, as well as cloud-based software that helps sellers build online storefronts. These services make MercadoLibre's platform even more convenient, and they're gaining traction with clients. In Q1 2021, 97% of items sold were shipped through the company's logistics division, Mercado Envios. That's up from 81% in Q1 2019.

Consider this from a seller's perspective: If you want to set up shop online, you can either do everything yourself (build a website, find a payments processor, orchestrate shipping, run marketing campaigns, etc.) or you can lean on MercadoLibre, benefiting from its massive scale and reputable brand.

Of course, there are other players in the region, such as Sea Limited's Shopee and Amazon. But MercadoLibre's marketplace dwarfs these rivals in terms of website and app visits, and the company's burgeoning logistics service just reinforces that advantage. In other words, if you're a seller, MercadoLibre looks like the most compelling option.

Not surprisingly, that has translated into impressive top-line growth.

Metric

Q1 2017 (TTM)

Q1 2021 (TTM)

CAGR

Revenue

$956.4 million

$4.7 billion

49%

Free cash flow

$232.1 million

$682.9 million

31%

Data source: Ycharts. TTM = trailing 12 months. CAGR = compound annual growth rate.

Investors should note that MercadoLibre is not profitable on a GAAP basis, as it continues to prioritize growth in the near term. For instance, the company offers shipping subsidies to sellers using Mercado Envios, allowing them to provide free delivery. MercadoLibre also launched Meli Air in 2020, a fleet of aircraft dedicated to logistics in Brazil and Mexico.

These moves make sense, as they create value for both buyers and sellers. But over time, as MercadoLibre pulls back on operating expenses, I believe this company will be quite profitable, as evidenced by its 42% gross margin over the past 12 months.

More importantly, the company should benefit immensely as e-commerce and digital payments continue to gain traction in Latin America. That's why investors should consider buying this growth stock.

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Image source: Getty Images.

2. UiPath

When most people talk about robots, they picture humanoid automatons from science fiction or mechanized arms in a factory. But when UiPath talks about robots, it means software capable of automating enterprise workflows.

Recent decades have brought major technological innovations -- personal computers, the internet, mobile devices -- but many employees still perform repetitive tasks every day. UiPath aims to solve this problem and accelerate productivity. To do so, its platform blends artificial intelligence, robotic process automation (RPA), and low-code development, allowing clients to build, deploy, and manage software robots.

These bots use technologies like computer vision, natural language processing, and machine learning to see, understand, and make decisions. More importantly, they are designed to emulate human behavior, meaning they become more intelligent over time. This allows enterprises to automate both simple and complex workflows, driving efficiency across departments.

Computer chip bearing the letters: AI.

Image source: Getty Images.

That compelling value proposition has helped UiPath grow quickly. During the first quarter of fiscal 2022 (ended April 30, 2021), revenue surged 65% to $186 million. Likewise, its customer count grew 31% to 8,500. Notably, 1,105 of these clients spend more than $100,000 each year.

More importantly, UiPath's net retention rate came in at 145% in Q1 2022, indicating a 45% uptick in average customer spend. That suggests a high degree of satisfaction, which should help this RPA specialist capture a large chunk of its $60 billion market opportunity.

As a final thought, since UiPath's IPO in April, Wood has bought shares hand over fist, investing $846 million year to date. In fact, UiPath now ranks No. 13 out of the 174 stocks in ARK's portfolio. That's a strong vote of confidence from one of Wall Street's best stock pickers, and it's why you should consider buying this growth stock, too.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.