Cathie Wood is the lead portfolio manager at Ark Invest, an asset management firm that focuses on disruptive technologies such as artificial intelligence, robotics, blockchain, and DNA sequencing. In 2020, Wood’s flagship Ark Innovation ETF saw a significant increase of 149%, outperforming the S&P 500. Although the fund underperformed in the following years, it has regained momentum, with a 60% increase since January 2023, surpassing the S&P 500.
As of March, Ark had 14.4% of its portfolio invested in two stocks: Tesla and Coinbase Global. Tesla accounted for 6.5% of the assets, while Coinbase Global accounted for 7.9%, indicating a high level of confidence from Wood and her team.
Tesla, a leader in the electric vehicle market, faced challenges in 2023 due to price cuts affecting growth and margins. However, the company delivered 1.8 million vehicles, showing a 38% increase from the previous year. Tesla’s future growth potential lies in its next-generation vehicle set to launch in 2025, which could significantly expand its market reach and capitalize on the growing demand for electric vehicles and autonomous driving technology.
Coinbase Global experienced volatility in recent years but returned to revenue growth in 2023, with a 52% increase in the fourth quarter. The company’s profitability was driven by strong revenue growth and cost management strategies. Coinbase has plans for international expansion and new trading services, positioning itself for future growth.
Investors should consider Tesla’s potential for sales growth in the coming years and its current valuation, which appears reasonable. On the other hand, Coinbase’s high valuation relative to sales growth may warrant caution until the company demonstrates faster revenue growth or a more favorable valuation.
Overall, Cathie Wood’s Ark Invest continues to show confidence in these two growth stocks, reflecting optimism about their future prospects.