3 Tech Stocks Cathie Wood Is Buying In 2021
In the last year, ARK Invest’s CEO and CIO
Cathie Wood has risen in popularity. ARK Invest is known for its
thematic ETFs (exchange-traded funds) that have generated
market-thumping returns since the pandemic-induced bear market
witnessed in early 2020. Cathie Wood can be considered Wall Street
royalty given her ability to identify companies that have the
potential to generate multifold gains for investors.
Let’s take a look at a few of the stocks Wood
is buying right now!
Cathie Wood is bullish on Shopify (NYSE:
SHOP) which is also Canada’s largest company in terms of market
cap. Shopify is a stock that has crushed the broader market ever
since it went public back in 2015. Since its IPO, Shopify has
returned an astonishing 4,120%. For example, $1,000 invested in
Shopify stock soon after it went public would have been worth close
to $42,000 today.
Despite its staggering returns, there is
enough room for Shopify to derive outsized gains in 2021 and
beyond. The COVID-19 pandemic acted as a tailwind for e-commerce
companies as people were forced to shop online. This also meant
that Shopify increased its merchant base in the last year as small
and medium enterprises had to innovate to avoid
Shopify’s sales soared by 86% year over year
in 2020 to $2.9 billion. The company’s merchant solutions sales
were up 117% year over year while subscription revenue also soared
53% last year. This allowed the e-commerce heavyweight to report a
net income of $320 million in 2020, compared to a loss of $125
million in 2019.
While top-line growth is forecast to
decelerate in 2021, it will still grow by a healthy 39.6% to $4.1
billion and by 31% to $5.36 billion in 2022. Shopify stock is
currently trading 25% below its record high giving investors an
opportunity to buy a quality growth at a lower multiple.
Unless you have been living under a rock in
the last year, you would have heard about the breathtaking returns
generated by Bitcoin and several other digital currencies. One way
to gain exposure to the highly disruptive cryptocurrency market is
by investing in shares of the largest crypto exchange in the
world-Coinbase (NASDAQ: COIN).
Ark Invest purchased close to 750,000 shares
of Coinbase soon after it went public and added another 340,273
shares a few days back.
Coinbase is a company that you should add to
your growth portfolio especially if you are bullish on the crypto
space in the long term. This company has an 11% market share in the
crypto exchange vertical. Like any other exchange, Coinbase
generates a majority of its revenue from transaction fees
that accounted for 96% of total sales in 2020. So, its revenue
is directly related to the volume of trading on its
In the first quarter of 2021, Coinbase
reported revenue of $1.8 billion. Comparatively, its revenue in
2020 and 2019 stood at $1.3 billion and $533.7 million
respectively. It also expects an adjusted EBITDA of $1.1 billion in
the March quarter compared to an EBITDA of $527 million in the
whole of 2020.
Another stock that Ark Invest has been
purchasing in 2021 is Sea Limited (NYSE:
SE) which is one of the leading e-commerce platforms in
Southeast Asia. Sea Limited was initially a communication platform
for gamers and it then started distributing games developed by
China’s Tencent for its audience base in Southeast Asia. It then
published its own in-house game called Free Fire which
took the gaming world by storm.
Sea Limited has since expanded into
e-commerce with Shopee and also launched SeaMoney which is
itU+02019s fin-tech vertical. Sea Limited stock soared 385% in 2020
and is up approximately 1,500% since its IPO in late
In the last quarter, the company’s sales more
than doubled driven by a 178% growth in e-commerce and a 72%
increase in its online entertainment business. The company is now
expanding in other growth regions including Latin America which is
a much bigger market compared to Southeast Asia. We can see why Ark
Invest is betting on this little-known stock that is already valued
a market cap of $126 billion.
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