We are living in a time of unprecedented technological change. As the founder and CEO of Bridgewater Associates, Raymond Dalio, noted in a recent interview, artificial intelligence (AI) could start to have a major impact on our lives in the next year.
But AI is not the only game-changing technology on the horizon. In the field of biomedicine, new gene-editing tools could open the door to revolutionary therapies for diseases that were once considered incurable. And in the transportation sector, electric vehicles are on track to replace fossil-fuel-powered cars within the next two decades, according to several industry insiders.
One of the most influential investors in these disruptive technologies is Cathie Wood, the visionary behind ARK Innovation ETF (ARKK 1.05%), a fund that specializes in finding and investing in companies that aim to transform the world. Here is a brief overview of two of Wood's top holdings and why growth investors may want to follow her lead on these names.
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Tesla
Cathie Wood is an unabashed bull on the world's premiere electric vehicle play Tesla (TSLA -1.11%). Keeping with this theme, Wood has made Tesla Ark Innovation's largest holding, and her bull case for the stock represents a nearly 720% upside potential from current levels (based on her 2027 price target). Wall Street, for its part, doesn't broadly share Wood's uber-bullish outlook on the electric vehicle maker's shares, but this top growth stock does have a track record of proving the naysayers wrong. Speaking to this point, Tesla's stock has delivered returns in excess of 1,130% in the past five years alone.
What's her investing thesis? Wood's bullish take is based on several factors, including Tesla's superior battery technology, software capabilities, autonomous driving potential, and global expansion plans. She also sees Tesla as a platform company that can leverage its expertise and infrastructure to open up new sources of revenue, such as robotaxis and renewable energy services. So, for growth investors who share Wood's vision of a greener and smarter world, Tesla screens as a must-own growth stock that could deliver exponential returns in the long term.
Crispr Therapeutics
Crispr Therapeutics (CRSP 0.34%) is a biotechnology company developing gene-editing therapies based on the CRISPR-Cas9 technology. This technology allows clinicians to edit DNA with unprecedented precision, opening up new possibilities for treating scores of inherited diseases. As of this writing, this biotech stock stands as Ark Innovation's 14th largest holding. Crispr Therapeutics is also Wood's seventh largest holding in her Ark Genomic Revolution ETF.
What's the bull thesis? Crispr Therapeutics ought to hear back from the Food and Drug Administration (FDA) before the end of the year about its sickle cell disease candidate exa-cel. The therapy is also being considered for approval by the FDA for another rare blood disorder known as beta-thalassemia. The agency is set to hand down a regulatory decision on this second indication by next March. If exa-cel scores a landmark approval in either of these settings, Crispr Therapeutics' stock could race higher.
The biotech, after all, has a pipeline full of high-value candidates and a regulatory nod would probably de-risk the stock to a degree in the eyes of some investors. An approval may also open the door to a buyout. To date, most large pharma companies have chosen the partnering route over a buyout to gain exposure to this groundbreaking tech. But a regulatory approval, which would validate the platform in the broad sense, may spark a run on CRISPR/Cas9 gene-editing platforms. And unlike Tesla, Wood and most Wall Street analysts seem to be in agreement about the exponential growth prospects of this gene-editing stock.
