Even with the wider market rebound, Cathie Wood hasn’t quite recaptured her initial investment allure. Her flagship fund, the ARK Innovation ETF (NYSEARCA:ARKK), remains a full two-thirds below its 2021 highs. Of course, ARKK and other funds debuted during a unique confluence of favorable conditions for growth stocks, including low interest rates, a surge in digitization, the frenzy around SPACs, and an expanding retail investor base. This has led to this list of undervalued Cathie Wood stocks.
That isn’t to say Cathie Wood didn’t nail some stock picks. Look to her early Palantir (NYSE:PLTR) projections, for example. Likewise, these undervalued Cathie Wood stocks stand out among her many picks as those most likely to rebound – soon and aggressively.
Crispr Therapeutics (CRSP)
Crispr Therapeutics (NASDAQ:CRSP) stands at the forefront of next-generation healthcare stocks, with its gene-editing potential being a major indicator of its undervalued potential. The field recently saw a significant breakthrough with the FDA’s approval of the world’s first gene-editing treatment. This groundbreaking therapeutic, Casgevy, developed in collaboration with Vertex Pharmaceuticals (NASDAQ:VRTX), is designed to treat Sickle Cell Disease effectively. Its approval marks a historic moment in genomics and heralds a new era of potential in healthcare investments.
Despite the groundbreaking nature of this approval, the market response was unexpectedly tepid. Much of the skepticism stems from short-term concerns, primarily focused on the total addressable market for Casgevy, estimated at around 100,000 patients in the U.S., and the treatment’s cost exceeding $2 million per patient. This makes it one of those undervalued Cathie Wood stocks.
While these considerations may suggest limited short-term financial returns compared to pricy R&D and go-to-market costs, such a narrow view ignores its potential as an undervalued Cathie Wood stock. Casgevy’s approval underlines the practicality of genomics as a treatment methodology for various diseases and could be the opening salvo in the genomics revolution Cathie Wood is projecting.
AeroVironment (AVAV)
AeroVironment (NASDAQ:AVAV) is one of those undervalued Cathie Wood stocks that’s remained out of typical investors’ sight despite surging 75% over the past year alone. The company specializes in unmanned drones designed for military use, distinguishing itself with a tech-centric approach that sets it apart from other defense industry giants focused on endlessly iterating existing failed products.
The company recently made headlines with the launch of its groundbreaking unmanned aircraft, the JUMP 20 Group 3, showcasing it during a military training exercise. This aircraft stands out not just for surveillance or offensive capabilities but also as an electronic warfare platform to disrupt enemy communications. These sophisticated, tech-intensive platforms are typically manned. Unmanned aircraft of this caliber marks a significant leap forward in military technology. AeroVironment’s focus on unmanned electronic warfare positions it as an emerging heavyweight in the defense tech landscape.
Last year, AeroVironment acquired Tomahawk Robotics for $120 million, underscoring its commitment to technological innovation. While still early and developing synergies, the acquisition will streamline AeroVironment’s operations. Tomahawk Robotics plays a vital role in providing core hardware for AVAV’s drone fleet, and bringing the firm under AeroVironment’s wider umbrella cuts down on inefficiency. Moreover, this strategic purchase will likely enhance AeroVironment’s profit margins over time, reinforcing its standing as an undervalued Cathie Wood stock with substantial potential for growth.
Amazon (AMZN)
Calling Amazon (NASDAQ:AMZN) undervalued may seem absurd – but not when viewed through the lens of the giant as an undervalued Cathie Wood stock. Part of Wood’s ARK Space Exploration & Innovation ETF (BATS:ARKX), Cathie Wood is betting on Amazon being a major player in the $1 trillion space sector. Amazon’s Kuiper Systems subsidiary seeks to “increase global broadband access through a constellation of 3,236 satellites in low Earth orbit” and “bring fast, affordable broadband to unserved and underserved communities around the world.” In this respect, Amazon is taking SpaceX on as a major competitor – and Cathie Wood thinks the stock is undervalued from that long-term lens.
A systems test in late December 2023 showcased these satellites’ capacity for data transmission among themselves, achieving a stable connection speed of 100 gigabits per second. Amazon has ambitions to roll out commercial services this year, boasting speeds of up to 400 megabits per second— twice the average broadband speed in the U.S. This make it one of those undervalued Cathie Wood stocks.
For now, Kuiper’s reliance on SpaceX for satellite launches to space limits its capability to compete directly with Musk. Meanwhile, Jeff Bezos’s other venture, Blue Origin, affiliated with Amazon, is intensifying its efforts to pose a direct challenge to SpaceX. Should Bezos manage to integrate a complete space-based value chain with the same effectiveness that he achieved with Amazon’s retail operations, this undervalued Cathie Wood stock could be worth far more than its current $1.84 trillion market cap.
On the date of publication, Jeremy Flint held no positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
