Finding companies that promise exponential growth isn't too hard. Lots of businesses claim to be the next "big thing". But separating the wheat from the chaff is another story. It can be a lot more challenging to identify companies that offer strong growth and are not wildly speculative.

One way investors can do this is by following the stock picks of Cathie Wood, whose ARK Invest funds are jam-packed with compelling growth stocks. Let's take a look at why two of our Motley Fool contributors are particularly interested in two of these names: Magna International (MGA -1.44%) and Rocket Lab (RKLB 2.19%).

Electric vehicles are the future for Magna

Lee Samaha (Magna International): It's difficult to find value stocks in an ARK ETF, but automotive supplier Magna International might fit the bill. The stock trades at less than 12.6 times its estimated full-year 2023 earnings. Moreover, if Magna can get anywhere near Wall Street estimates of $6.41 in 2024, then the stock will look like a great value at less than 10 times earnings.

That said, there's a reason why Magna and other automobile suppliers -- like, say, Lear and Autoliv -- trade on relatively low forward multiples. The valuations reflect uncertainty around global light vehicle sales and production in the face of rising interest rates, rising automobile inventory, and a slowing global economy. For example, automobile retailer AutoNation reported a 2.4% year-over-year drop in new vehicle unit sales in the first quarter. There's also the longer-term fear among investors that light vehicle production growth will be low as policymakers push for more expensive electric vehicles (EVs) to replace internal combustion engine (ICE) vehicles.

The opportunity for auto suppliers is to make themselves relevant to EV production and grow their content per EV. Magna is well placed because most of its products (including lighting, exteriors, seating, mirrors, advanced driver assistance systems (ADAS) solutions, and battery enclosures) are agnostic to shift from ICE to EV or actually increase in content per vehicle. 

Moreover, if the recent announcement of a $790 million investment in three facilities to support Ford's electric truck production is anything to go by, then Magna's future in the EV world looks assured. As such, it should be able to grow profits over the long term, even if overall light vehicle production is a low-growth industry over the next decade.

Rocket Lab is an out-of-this-world opportunity

Scott Levine (Rocket Lab): Found in two Cathie Wood funds, the ARK Autonomous Technology & Robotics ETF and the ARK Space Exploration & Innovation ETF, Rocket Lab is a stock that has drawn increasing attention from Wood recently. In May and June, for example, the two ETFs have added a combined 552,517 shares of Rocket Lab, a pioneer in the burgeoning space industry.

Primarily, Wood focuses on growth stocks that are often on the cutting edges of the industries in which they operate. That's certainly the case with Rocket Lab. The company brandishes its Electron rocket as the second most frequently launched rocket among U.S. companies and the fourth most frequently launched rocket globally. With 39 launches under its belt, the Electron rocket has deployed 170 satellites in space, and Rocket Lab claims it's the only reusable small launch vehicle.

Rocket Lab is working to expand its offerings. It's developing the reusable, medium-capacity Neutron rocket, which is expected to have a payload capacity of about 15,000 kilograms -- notably larger than the 300-kilogram payload capacity of the Electron rocket. In addition, Rocket Lab plans on Neutron being suitable for human space flight.

While Rocket Lab is a leading option for space investors, it should only remain on the radars of those comfortable with a stock at the higher end of the risk spectrum. Although Rocket Lab expects to expand its gross profit margin in second-quarter 2023 to 14% to 16% from 11.6% in Q1 2023, the company has failed to achieve a profit at the bottom of the income statement.

Are these Cathie Wood fund stocks right for you?

For investors interested in a more conservative approach to EV exposure, Magna International certainly warrants strong consideration. Because it serves a variety of other vehicle manufacturers, it mitigates the risk of an individual company suffering a downturn. Rocket Lab, on the other hand, is a must-watch stock for investors who seek a way to benefit from the growing space economy. For those with patience, Rocket Lab's growing proficiency in operating in the final frontier could prove to be profitable in the long term.