Discover the 3 Stocks Cathie Wood Just Snapped Up – Are They the Next Big Winners?

Key Points

• Investment expert Cathie Wood recently purchased shares of Tesla, Cerus, and Robinhood Markets, stocks which have all felt the heat since reaching their respective peaks.
• While many macro concerns are negatively impacting car sales in 2023, Tesla has nonetheless seen success this year due to price reductions.
• Cerus and Robinhood Markets are two companies in very different industries that have low-priced stocks. Recently, they have been making progress in reducing the amount of money they are losing.

1. Tesla

Tesla Motors has been one of the best-performing stocks this year, and it’s no surprise that it’s currently Cathie Wood’s largest holding across all of Ark Invest’s ETFs. After hitting a low point in early January, the electric car maker’s stock price more than doubled in just six weeks. While the shares are now down 16% from their mid-February highs, Wood is confident that this is just a temporary setback.

Interestingly, the stock has continued to rise despite Tesla’s recent announcement of price cuts for its signature vehicles. While the company’s Investor Day presentation earlier this month didn’t meet all of the hype, the fast-growing automaker shows no signs of slowing down. In fact, Tesla has ambitious plans to expand its production capacity so that it can deliver a staggering 85 million new vehicles by 2030.

Although Cathie Wood is a well-known advocate for Tesla, she is not the only investor who sees potential in the company. In fact, billionaire George Soros has recently boosted his stake in the stock as well. Despite the impressive gains Tesla has made so far this year, up approximatly 60% last year, its stock price is still trading at less than half of its peak from late 2021. This suggests that there may still be room for growth and that both Wood and Soros believe in the long-term potential of Tesla.

With Tesla having recently cut its prices, the company’s margins are now being put to the test. While it’s likely that the gross margin on new vehicle sales will take a hit, the price reduction could also help accelerate Tesla’s market share gains in the traditional and often slow-moving automotive industry. If more drivers are willing to pay for features like full-self driving and connectivity, it could prove to be a profitable gamble for Tesla, benefiting both the top and bottom lines of its income statement.

2. Cerus

Cerus is a smaller company within the Ark Invest funds, with a market cap of less than $500 million. Currently trading at under $3 per share, it is also one of the lowest-priced investments on Cathie Wood’s radar. The company is a biotech firm with an Intercept platform that has the potential to reduce pathogen loads in various blood components. This platform could be a promising development in blood safety.

However, Cerus recently reported disappointing quarterly results, with revenue of $44 million falling short of the expected $46 million, and posting a wider-than-expected loss for the quarter. On the positive side, the company has achieved six consecutive years of double-digit revenue growth. If it can become an industry standard in blood safety and continue to reduce its deficits while growing its business, Cerus may not remain one of Wood’s lesser-known holdings for long. There is significant upside potential if the company can achieve success in this area.

3. Robinhood Markets

Although the stock chart may not show it, Robinhood Markets made significant strides in 2022. The company enhanced its offerings throughout the year, expanding trading hours, introducing a debit card with cash rewards, streamlining money transfers, and launching its own IRA with a match feature.

However, Robinhood’s stock price fell 54% last year, and the company also experienced setbacks such as a decline in headcount, a drop in total net revenue, and a decrease in monthly active users. Assets under custody also declined significantly.

Despite these challenges, Robinhood Markets is making progress. The company recently posted positive adjusted EBITDA in its latest quarter, and its losses are expected to narrow sharply as it improves its cost structure. The company’s founders have even reduced their stock-based compensation.

With stock and crypto prices on the rise, Robinhood is likely to see an uptick in trading activity. Additionally, the company’s transformation into a more complete fintech platform is worth monitoring. While the stock price is still in the single digits, Cathie Wood clearly sees a buying opportunity in Robinhood’s potential for growth.