Cathie Wood continues to challenge conventional wisdom. She believes the Federal Reserve has tightened too aggressively and will have to reverse course sooner than anticipated.

She also thinks that innovation leaders will be the first stocks to emerge from this downturn. If she's correct, Roku (ROKU -10.29%), Zoom Video Communications (ZM 1.57%), and Block (SQ 2.32%) are three top Ark Innovation ETF holdings that should lead the way.

1. Roku

Television is switching to streaming, and Roku has placed itself in the center of that trend. While it may appear to merely aggregate all the streaming channels on to one platform, its strength from the investor perspective is advertising. Since its site caters most strongly to advertisers, Roku gives programming providers an outlet for revenue generation as broadcast TV transitions to streaming.

Cathie Wood recently gave Roku a $605 per-share price target by 2026. However, investors seem to feel differently, as they have sold Roku stock amid the bear market, which has fallen nearly 90% from its February 2021 high. Supply chain constraints regarding equipment and slowing growth in ad spending put further pressure on the stock. Roku forecast just 3% revenue growth in Q3, down from 56% in 2021.

But for all the problems, Roku claims a leading 31% market share in global streaming, according to Conviva. Moreover, for the 2022-23 television season, it received over $1 billion in commitments due to deals with all seven major agency holding companies.

And investors should note that revenue growth remains positive, rising 23% year over year to $1.5 billion in the first two quarters of 2022.

Additionally, the 2.5 price-to-sales (P/S) ratio takes its valuation to a record low. Between that valuation and Roku's increasingly important role in television, buying Roku could become the smartest thing you ever do if it can meet Wood's price target.

2. Zoom

Cathie Wood has stood out for her $1,500 per-share price target by 2026 on Zoom. While that could prove aggressive, Zoom has undoubtedly become the platform of choice, as it continues to claim a 74% market share of the online meeting space, according to Datanyze.

And while that dominance made it a significant Cathie Wood investment, it may be the expanding ecosystem that seals the deal. In addition to Zoom Meetings, offerings such as Zoom Phone, Zoom Contact Center, Zoom Webinars, and others could increasingly coalesce to build a formidable communications ecosystem.

Zoom Phone, which enables secure voice calls, benefited from record results in its latest quarter (which ended July 31), as accounts of 10,000 or more surged 112% higher year over year. Also, clients such as UCLA and Warner Bros. Discovery have adopted the Zoom Contact Center.

Amid this progress, revenue continues to grow -- coming in at $2.2 billion in the first half of the year, up 10%. Also, since the company generated $723 million in free cash flow during the same period, it can continue to invest in itself regardless of interest rates.

The stock has fallen nearly 90% from its 2020 high, and competition --  particularly from Microsoft -- will continue to loom large. Nonetheless, its P/S ratio of five is at a record low, and if it can build on its dominance in the meeting space, Zoom has a shot at living up to Wood's expectations.

3. Block

Jack Dorsey has received a lot of negative reactions from taking Block (formerly known as Square) in a heavily Bitcoin-oriented direction. However, one supporter is Cathie Wood, an early backer of cryptocurrency. Now, with Block eyeing a full-fledged Bitcoin ecosystem, Block could surge much higher if conditions prove Dorsey and Wood right.

Moreover, Block's Square ecosystem continues to gain popularity as a financial platform for small and medium-sized businesses in the developed world. This is especially true in the U.S., where it can serve as both a fintech company and traditional bank. Additionally, Cash App has emerged as a popular alternative to PayPal's Venmo social payments platform, growing to more than 80 million users.

These ecosystems led to a gross profit for the first half of 2022 of almost $2.8 billion, surging 31% compared with the same time frame last year. Still, amid the falling price of Bitcoin and a bear market, Block's share price has fallen to 2018 levels.

However, Block's valuation has also fallen to record lows. While its P/S ratio is just under two, it rises to about three if backing out the 42% of revenue derived from Bitcoin so far this year. That valuation, along with the successes of its Square and Cash App segments, could make it a buy even if one is leery about Wood's and Dorsey's predictions for Bitcoin.