Cathie Wood's ARK Invest ETFs are some of the hottest funds after 2020's huge stock market gains. Six ARK Invest stocks to buy and watch are Coinbase, DraftKings, Square, Teladoc Health, Tesla and Zoom Video.
The ARK Invest investment company's flagship fund is ARK Innovation ETF (ARKK). The ARKK ETF focuses on companies that exhibit "disruptive innovation," a technologically enabled new product or service that potentially changes the way the world works.
The ARK Innovation ETF surged more than 152% in 2020, handily beating the Nasdaq's hefty 43.6% return.
Other ARK ETFs include Autonomous Technology & Robotics (ARKQ), Next Generation Internet (ARKW), Genomic Revolution (ARKG), Fintech Innovation (ARKF) and the recently debuted Space Exploration and Innovation (ARKX).
How To Invest Like Cathie Wood: Focus On Game Changers
The ARKK fund's huge gain in 2020 resulted from big stock success stories in cutting-edge tech areas: DNA sequencing, robotics, artificial intelligence, energy storage and blockchain technology.
"Disruptive innovation is often not priced correctly by traditional investment strategies because people may not understand how big the ultimate opportunities are going to be. They aren't sizing the opportunity and they aren't analyzing the disruption," Wood, the founder and CEO of ARK Invest, commented on the company's website.
ARK Invest Stocks To Buy And Watch
Amid the current stock market uptrend — according to IBD's market outlook — investors should focus on buying top stocks breaking out past correct buy points.
Source: ARK funds data as of June 1, 2021
Cryptocurrency exchange Coinbase debuted on April 14, pricing at $250 a share. Coinbase stock closed its first day of trading 328.28, up 31.3%, for a valuation of $87.3 billion. Investors should wait for a new base to form before jumping into the hot IPO stock.
The new stake in Coinbase represents another one of the Ark Invest stocks that offers more exposure to cryptocurrencies.
Coinbase stock rallied over 2% Wednesday.
DraftKings is an online sports platform that allows users to play daily fantasy games and win cash prizes. The company is poised to take advantage of the expanding legalization of digital sports betting across the U.S.
DraftKings stock is above its 50-day moving average, and the long-term 200-day line. It is forming a cup base with a 74.48 buy point. Shares are about 20% off their 52-week high.
The sports-betting leader is one of the newest ARK Invest stocks. On March 8, ARK Invest disclosed a new position of 748,000 shares for the ARKK ETF.
DKNG stock moved up 1.3% Wednesday.
Zoom Video Stock
Zoom Video is the leader in modern enterprise video communications, with a cloud platform for video and audio conferencing, chat, and webinars across mobile, desktop, and room systems.
After the close Monday, Zoom Video reported its quarterly results. Zoom earnings jumped to $1.36 per share, topping estimates for $1.16. Revenue came in at $1.02 billion, beating estimates for $991.2 million. Despite the earnings and sales beats, the company offered weaker-than-expected earnings guidance for the current quarter. Shares plunged over 16% in response.
On Wednesday, Zoom stock rallied over 2.5%.
This Cathie Wood Stock Pick Hits New Buy Point
Square is a digital payments and cryptocurrency leader. Recently, Square disclosed a new $170 million investment in Bitcoin on top of its $50 million purchase in October. Bitcoin represents 5% of total company assets.
Square stock is trading right at a 267.87 handle buy point, according to IBD MarketSmith chart analysis. Despite soaring more than 700% from the coronavirus bear market lows, SQ stock's base is still early stage.
According to IBD Stock Checkup, Square stock shows a strong 98 out of a perfect 99 IBD Composite Rating. The IBD Composite Rating helps investors easily measure the quality of a stock's fundamental and technical metrics.
Square stock was up 0.3% Wednesday.
Why Tesla Is One Of The Top ARK Invest Stocks
Tesla stock is one of the top ARK Invest stocks, with whopping 10% weighting in the ARKK ETF portfolio. In mid-January, ARK Invest unveiled its 2025 price target on Tesla stock of $3,000 a share.
Tesla stock rallied 0.7% Wednesday. The EV giant is an IBD Leaderboard stock.
Shares are back above a 700.10 aggressive buy point deep inside a correction. Meanwhile, a deep, large base continues to take shape.
Teladoc Health Stock
Teladoc Health provides on-demand health care services, such as nonemergency doctor's appointments, online. More doctors and patients are opting for telemedicine due to Covid-19. Teladoc is one of the biggest ARK Invest stocks, with an over-6% portfolio weighting in the ARKK portfolio.
TDOC stock is trading about 50% off its 52-week high. Shares gained over 1% Wednesday.
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