ARKK - 3 Best Cathie Wood Stocks to Buy Now

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Ark Invest CEO Cathie Wood had already gained some notoriety prior to the pandemic-induced stock market collapse of early 2020, but she became famous — or “finance famous” anyway — on the growth-stock-led rebound. Best known for creating ETFs focused on disruptive innovations and her bold investment in Tesla (NASDAQ:TSLA), she quickly rose to superstar investor status amid the surging bull market.  Yet, it’s been a different story this year, with even the best Cathie Wood stocks getting crushed in the sell-off.

Her flagship ETF, the Ark Innovation Fund (NYSEARCA:ARKK), is down 55% so far in 2022 and 73% from its all-time high, made in February 2021. Its top holdings have changed a few times, but that hasn’t helped the fund regain traction. While ARKK is trading 22% above its 52-week low, made in May, the fund just had its biggest monthly outflows in almost a year.

Yet, there may be opportunity in some beaten-down growth stocks, especially when the market turns from bear to bull again. With that in mind, here are the best Cathie Wood stocks that may be worth buying at today’s prices.

Shopify (SHOP)

It’s been a disastrous year for investors in former pandemic darling Shopify (NYSE:SHOP). Shares of the e-commerce platform provider are down 77% year to date and 82% from their all-time high, made in November 2021.

Management misjudged the post-Covid-19 business environment (and admitted as much), prompting the company to lay off of a 10th of its workforce. And even if it hadn’t grossly miscalculated, it’s unlikely the high-flying growth stock would have been spared during the latest bear market.

At some point, though, shares have value based on the company’s projected growth. Analysts are forecasting revenue growth of between 20% and 40% a year from now through 2025. If the company can deliver, SHOP stock is likely to trade higher.

Twilio (TWLO)

Cloud communications platform operator Twilio (NYSE:TWLO) is another pandemic star that burned out. Between its March 2020 low and February 2021 all-time high, shares soared more than 570%. Currently, though, shares are trading near their pandemic lows after losing roughly three-quarters of their value so far this year.

While the company’s growth was slower in the second quarter compared to previous quarters, revenue was still up 41% year over year, while organic revenue increased 33% from a year ago. However, Twilio reported a loss of 11 cents per share and delivered weaker-than-expected third-quarter guidance, calling for revenue growth of “only” 30% to 32%. That’s nothing to sneer at, but investors haven’t been particularly forgiving in recent months.

Taking a longer-term perspective, Twilio is a robust communications platform as a service (CPaaS) company, dominating texts, emails and notifications. Companies can’t live without Twilio, and analysts’ estimates seem to reflect that. They are calling for revenue growth averaging more than 30% a year through 2025 and for the company to turn a profit next year.

When investors are once again ready to reward growth, TWLO stock should rebound.

Tesla (TSLA)

We can’t leave out Tesla (NASDAQ:TSLA), the stock that put Ark Invest and Cathie Wood on the map. In addition to the Ark Innovation Fund, shares are also held in the ARK Autonomous Technology & Robotics ETF (NYSEARCA:ARKQ).

Tesla faces numerous headwinds, including supply chain issues, lockdowns in China, and an explosion in competition from everyone from startup EV companies to established automakers like Ford (NYSE:F). But Tesla appears to be taking it all in stride.

In August, Tesla’s China-made car deliveries tripled as lockdown restrictions were lifted. For the second quarter, the company reported revenue of $16.9 billion. This was in line with estimates and up 41% year over year. Meanwhile, earnings of $2.27 a share easily beat analysts’ expectations.

Lifelong Tesla bears have gone from calling for bankruptcy to bemoaning the stock’s valuation. Yes, the stock is more expensive than a typical automotive stock — and it should be! In short, TSLA stock remains the best of the best Cathie Wood stocks.

On the date of publication, Bret Kenwell did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

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