Cathie Wood gained fame as a star stock picker after her Ark Invest's family of exchange-traded funds (ETFs) generated stellar returns in 2020. Although 2021 was a different story, Wood's stock-picking prowess remains just as popular. Some growth investors, in particular, closely track what stocks Cathie Wood is buying, given her love for innovation and growth companies.
Here are three stocks Cathie Wood is bargain hunting right now.
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The latest electric-vehicle stock on Wood's radar
I'll start with one of Cathie Wood's most notable buys in recent times. Wood has owned several electric-vehicle (EV) stocks for some time time now, but she has a new-found love: Nio (NIO 2.30%). On March 25, Ark Invest's Autonomous Technology & Robotics ETF (ARKQ -0.30%) added 420,057 shares of Nio for the first time. Nio shares had lost almost 50% in the six months through March 25.
Wood sees huge potential in the EV industry, and rightfully so -- global electric-car sales are booming.
Nio has been around since 2014 and is among the prominent EV manufacturers in China today, having delivered 91,429 EVs in 2021. That number more than doubled over 2020, and Nio's revenue jumped 122% to roughly $5.6 billion in 2021. Importantly, in its latest earnings conference call, Nio said it could break even in the fourth quarter of 2023 and even generate its first full year of profit in 2024 if its plans work out.
Nio's plans for 2022 include the launch of three vehicles and entry into several European markets. The company started deliveries of its flagship sedan, ET7, on March 28, as planned. In the long run, Nio wants to build a mass-market brand that sells affordable EVs with the same high-end technology as its premium cars today.
In between, if China can resolve its accounting-regulation standoff with the U.S., as speculated, Nio should be able to shake off a major overhang and focus on growth, which should only add to the stock's appeal.
Riding the rise of cryptocurrencies
Cryptoassets are among Wood's biggest growth ideas for 2022 and beyond, and Coinbase Global (COIN 2.01%) has perhaps been the biggest beneficiary as a publicly listed company from the recent boom in cryptocurrencies like Bitcoin. In fact, the rise in weekly market capitalization of the global cryptocurrency market between 2010 and March 2022 has been nothing short of a miracle, and nearly all of those gains happened in just the past couple of years.
Coinbase Global is the top exchange for trading cryptocurrencies and earns a fee every time someone buys or sells a cryptocurrency. Cathie Wood has been buying shares in Coinbase regularly this year across three Ark Invest ETFs, including back-to-back purchases on March 28 and March 29.
In 2021, Coinbase's verified user count more than doubled to 89 million, and trading volume on its platform jumped more than eight times to nearly $1.7 trillion. The company earned a net income of $3.6 billion last year.
Coinbase stock will likely be volatile, but growth potential in the long term is huge, especially now that the company has also launched a non-fungible tokens (NFT) marketplace.
Real growth lies in this segment of e-commerce
Shopify (SHOP 0.14%) is among Wood's highest-conviction stocks, and she's bought shares in the company consistently in recent weeks. In an interview with BNN Bloomberg last year, Wood even predicted Shopify will become as big as Amazon.com.
Shopify already has a solid competitive advantage over Amazon that Wood's also betting on: social e-commerce, or the ability to buy and sell products through social media. Shopify is a frontrunner and has tied up with nearly every popular social media platform to provide its merchants with multiple channels to sell from. For example, a Shopify merchant can add a shopping tab to their profile on popular digital-entertainment platform TikTok that links directly to their online Shopify-store checkout.
Already, Shopify's niche target market of entrepreneurs and small businesses has helped it gain a lot of traction over the years. In 2021, Shopify generated revenue worth $4.6 billion, or 57% higher over last year. The company might be expecting slower revenue growth in 2022, but that doesn't change its long-term prospects. With Shopify's shares also tanking in recent months, it's no surprise that Cathie Wood is doubling down on the company's shares.
