Cathie Wood’s investment acumen gained widespread recognition in 2020 when exchange-traded fund (ETF), the technology-focused ARK Innovation (ARKK), posted a remarkable return of 149%. This surge in performance drew substantial attention to her investment strategies, particularly during the pandemic, which marked the peak of her firm’s popularity.
While recent market volatility presents challenges, the expected interest rate cuts later this year could create a strategic opportunity for investors seeking to capitalize on Cathie Wood’s expertise in aggressive growth investing.
Finbold has analyzed the current market conditions and growth outlooks to identify 2 Cathie Wood stocks for long-term investment.
Picks for you
Block, Inc. (NYSE: SQ) stock
Jack Dorsey-backed firm Block Inc. (NYSE: SQ) remains a strong investment choice due to several compelling factors. As a leading financial technology company, Block capitalizes on the growing trend of non-banking financial management through its innovative solutions in digital payments with CashApp and Square. Since 2016, Block’s stock has appreciated by 416%, reflecting its ability to deliver substantial returns to investors.
The company’s resilience is evident as a robust economic environment can significantly boost its revenue through increased consumer spending, leading to higher transaction volumes on its platforms. Additionally, Block’s stock has seen a 5-day gain of 0.83%, indicating recent positive momentum.
Institutional support is evident, with Ark Investment maintaining a substantial stake since 2016. Financial health is strong, with Block holding $6.13 billion in cash against $5.08 billion in debt.
Valuation metrics further support its potential: a market cap of $39.01 billion, an enterprise value of $35.73 billion, a price-to-sales (P/S) ratio of 1.74, and a forward P/E ratio of 17.08. These factors make Block, Inc. an attractive buy for investors looking to tap into the financial technology sector’s growth potential.
Amazon (NASDAQ: AMZN) stock
Recently, ARK Invest’s ARK Next Generation ETF acquired 53,368 shares of Amazon (NASDAQ: AMZN) stock for $9.9 million. This significant purchase by a high-profile investment firm underscores confidence in Amazon’s growth prospects and strategic direction. Amazon’s financial performance is robust, with a revenue of $590.74 billion and a net income of $37.68 billion over the last twelve months.
Amazon Web Services (AWS) continues to be a major growth driver, generating $25 billion in sales last quarter, a 17% year-over-year increase. AWS’ operating income nearly doubled to $9 billion, representing over 60% of Amazon’s total operating income.
Amazon’s strategic investments in artificial intelligence (AI) and market diversification further bolster its growth potential. Its AI initiatives, including collaborations with Anthropic and the development of proprietary AI processors, are expected to enhance its cloud services.
Additionally, Amazon’s entry into the streaming advertising market through Prime Video has shown promising results, with a 25% year-over-year increase in advertising revenue in the first quarter.
Valuation metrics suggest Amazon is attractively priced. With a trailing PE ratio of 55.68 and a forward PE ratio of 44.21, the stock is reasonably valued given its growth prospects.
Amazon’s diverse business model, strategic investments, and strong institutional support make it a compelling buy. The company’s ability to innovate and adapt positions it for sustained growth, making Amazon an attractive long-term investment opportunity.
While both of the above showcase strong financial health, innovative strategies, and robust growth potential, it is important to remember that with high growth potential comes inherent risk.
Market volatility and economic uncertainties can impact these stocks, making it essential for investors to stay informed and consider their risk tolerance. Diversifying your portfolio and maintaining a long-term perspective can help mitigate potential downsides.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
