Co-founder and CEO of Ark Invest, Cathie Wood, has been one of our most prolific growth stock investors. Perhaps the narrative around the best Cathie Wood stocks truly peaked during the pandemic. Her investment firm witnessed a dramatic surge in inflows during the pandemic years, but things have been choppy lately. Nevertheless, with interest rate cuts expected later this year, it’s an ideal time to leverage Wood’s insights into aggressive growth investing.
Hence, keeping tabs on Cathie Wood’s top stock could be incredibly rewarding for investors looking to take on more risk. That said, here are three red-hot Cathie Wood stocks to buy, ready to benefit from a revitalized market sentiment. These stocks are poised for an impressive showing to close the year, resulting in substantial upside potential at current prices. Their underlying businesses are expected to continue growing on the back of secular tailwinds.
Amazon (AMZN)
It’s easy to see why Wood is invested in Amazon’s (NASDAQ:AMZN) illustrious growth story. Last month, ARK Invest’s ARK Next Generation ETF acquired 53,368 shares of AMZN stock for $9.9 million.
To be fair, Cathie Wood’s recent pivot towards AMZN stock was long overdue, especially considering how it hasn’t flown under the radar for the past couple of years. The tech giant has been a storied stock over the past decade, with its tentacles spread across multiple sectors, such as advertising, streaming, gaming, and groceries.
Moreover, Amazon’s strategic investments in AI have added new layers to its growth trajectory. These include its AI investments, notably its collaboration with Anthropic, and the critical role of its cloud service in powering the AI revolution. Last quarter alone, Amazon Web Services (AWS) generated $25 billion in sales, a 17% increase on a year-over-year (YOY) basis. Overall, its sales jumped to $143.3 billion, marking a 13% increase from the prior-year period while exceeding estimates for the fifth consecutive quarter.
JPMorgan analysts are pounding the table over AMZN stock’s prospect, expecting the firm to outpace Walmart (NYSE:WMT) to become the largest U.S. retailer by the end of 2024.
Robinhood (HOOD)
Cathie Wood has been a long supporter of Robinhood (NASDAQ:HOOD), with her stake in HOOD stock valued at nearly $600 million, a sizeable 4.7% of her portfolio’s total.
Over the past year, HOOD stock has been on fire, fueled by the vibrant AI and meme stock trading frenzy and robust crypto market rally. In Q1, the platform’s net sales surged to $618 million, blowing past analyst expectations of $555 million. Moreover, the trading platform’s user base has grown impressively. Monthly active users climbed to 13.7 million from 11.8 million in the prior-year period.
Its blowout results have plenty to do with the 232% YOY increase in crypto sales in Q1 to $126 million, as the platform effectively leverages the crypto wave. To further bolster its position, Robinhood recently sealed a $200 million deal to acquire Bitstamp. The top-tier crypto exchange in Europe and Asia diversifies Robinhood’s offerings while positioning it among the leading crypto exchanges.
PagerDuty (PD)
Cathie Wood’s relentless investing approach was on full display last month as she placed bets on PagerDuty (NYSE:PD) stock. Despite the company’s spotty track record, she accumulated PD stock on every trading day. Consequently, her stake in the firm is valued at a whopping $216 million, representing 1.72% of its portfolios.
Perhaps her persistence aligns with Wall Street’s upbeat reaction to PD’s encouraging Q1 results. With the firm comfortably beating its top-and-bottom-line estimates, it announced a massive $100 million share buyback plan. Though sales have lately risen by just single-digit margins, experts forecast a rebound to double-digit revenue gains for the upcoming fiscal year and beyond.
Analysts forecast a healthy bump in adjusted profits of 14% next year. That should be followed by a further 24% boost in fiscal 2027. This optimistic financial trajectory positions the enterprise software giant for monumental gains ahead.
On the date of publication, Muslim Farooque 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.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
