7 Favorites of Cathie Wood

7 Favorites of Cathie Wood
7 Favorites of Cathie Wood

During the pandemic, Cathie Wood proved to have a golden hand in stock selection. Her favorite stocks soared in value, the ARK Innovation ETF even rose by more than 10% in one day. At the moment things are not going well and ARK has lost a lot of value.

But Cathie Wood’s favorites list is still promising. These stocks can now be picked up while their prices are at historic lows. InvestorPlace lists 7 of Wood’s favorites.

1. Nvidia
2. General Motors
3. Roblox
4. Unity Software
5. Matter Port
6. Draft Kings
7. Coinbase Global

Nvidia – attractive entry level for the long-term promise

Chip giant Nvidia had a difficult second quarter with growth figures significantly lower than market expectations. Inventory problems at partners weighed on the result. In addition, the declines in gaming and crypto revenues have contributed to that as well.

But Nvidia’s long-term story still stands firm. The chip giant has an impressive track record and incredible prospects. It covers promising markets such as autonomous vehicles, edge computing and the metaverse. The global graphics processing unit (GPU) market alone is set to grow by 33.6% through 2027. Nvidia’s market share in this is 21%. In addition, the data center operations continue to impress.

General Motors – future lies in EVs

General Motors is one of the big names in the automotive industry. However, it has struggled to increase its sales in recent years. GM, meanwhile, has shifted its focus to an all-electric future. The carmaker plans to abandon its old combustion engine business altogether.

By 2025, GM plans to invest more than $35 billion in EVs and by 2035 only EVs will roll off the production line. The focus on EVs is likely to prove extremely beneficial for GM stocks in the long run. GM recently announced its return to dividend payments and increased its share buyback program by a staggering $5 billion. In addition, the shares are trading at less than 0.37 times expected revenue.

Roblox – long-term perspective remains intact

Metaverse gaming company Roblox achieved spectacular growth in subscribers and revenue during the pandemic. Now that the pandemic is ebbing, that tailwind is easing. That doesn’t change the fact that Roblox can take advantage of the metaverse concept becoming mainstream. July’s numbers suggest that investor concerns are a bit over the top.

The company achieved double-digit sales growth. Direct purchases of its own game currency Robux fell by 4%. Almost half of the turnover comes from these bookings, making the decline a major cause for concern. But Roblox reported 8% to 10% growth in bookings in July, with a 26% increase in daily active users to 58.5 million. The stock is down more than 60% so far, which makes it a lot more attractive.

Unity Software – IronSource acquisition pays off

Unity Software is a platform for creating 3D content, indispensable for video games. This market leadership position in its niche has enabled the company to grow rapidly in recent years. Earnings have increased by about 43% on average over the past five years, which has served the stock well.

Growth has normalized lately, prompting Unity to embark on an acquisition path. IronSource is arguably the most important acquisition of recent months. Apple’s privacy measures threatened Unity’s advertising revenue. The takeover of IronSource offers a solution for this. Now might be a good time to pick up Unity stock at a massive discount.

Matterport – robust user growth

Matterport is a specialist in the field of 3D maps. Last year the stock rose sharply in popularity, when it was listed on the stock exchange via a spac. Little is left of the peak in the exchange rate of 33 dollars. The stock is currently trading at a fraction of that price. Supply chain issues weigh on results.

In the second quarter, however, the number of subscribers increased by 52% compared to the previous one. The 616,000 subscribers are 90% free users, which offers great opportunities for the company. According to the CEO, Matterport has a huge order book that must be completed in the coming quarter. Healthy upside potential lies ahead for the equities.

DraftKings – betting on growth

DraftKings is one of the top online sports betting companies in the US. It operates in 17 states and is growing every year. Draftkings is a remarkably consistent company, with sales growth of around 50% over the past few years. The most recent quarter saw a healthy 57% increase in sales to $466 million, with Draftkings raising its full-year revenue forecast.

The legal sports betting market has grown exponentially and is likely to continue to grow at double digits for the foreseeable future. With the company’s robust growth rates and expansion plans, the stock remains an excellent long-term bet.

Coinbase Global – after the crypto winter, there will be another spring

Coinbase Global crypto trading platform is a major player with over 100 million verified users. The company made its IPO in April last year. Since then, Coinbase has struggled, but still outperforms the competition in terms of trading volume and user base.

The ‘crypto winter’ created a bleak climate, so that the results in the second quarter were remarkably lower than a year ago. Coinbase is noticing a shift in customer and market activity, driven by both macroeconomic and crypto credit factors. But there is hope. The crypto markets will not remain in the doldrums forever. And once they start to gain momentum again, so will Coinbase’s stock.

Watch next: 6 speculative tips from Cathie Wood

The article is in Dutch

Tags: Favorites Cathie Wood

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