During the pandemic years, Cathie Wood’s favorite stocks became massive wealth-builders. Her tech-heavy representative ARK Innovation ETF (NYSEARCA:ARKK) increased in value by more than 10% in a single day.
However, with the current market downturn, and the risk-off attitude of investors, ARKK has shed a ton of value. Nevertheless, many of Cathie Wood’s favorite stocks show she has an incredible track record of picking wealth-compounding that cannot be ignored.
Wood has made her career as a maverick stock picker, claiming that her success lies in the number of ideas she generates. Last year, she became more of a cult-like figure during the speculative tech boom.
Markets have pulled back substantially amidst multiple economic headwinds, but Cathie Wood’s favorite stocks remain as relevant as ever, considering these stocks can be picked up at historic lows.
| MTTR | Matterport | $4.61 |
| COIN | Coinbase Global | $66.80 |
| RBLX | Roblox | $39.11 |
| U | Unity Software | $42.72 |
| NVDA | Nvidia | $150.94 |
| DKNG | DraftKings | $16.06 |
| GM | General Motors | $38.21 |
Matterport (MTTR)
Matterport (NASDAQ:MTTR) is a 3D spatial mapping specialist that soared in popularity last year. Shortly after merging with a special purpose acquisition company (SPAC) last year, MTTR stock traded at an all-time high of $33. It only trades at a fraction of that price at this time.
Matterport produces software that enables its users to create “digital twins” of real-world spaces using 3D cameras. The scans are then uploaded to a cloud-based platform for further application, including virtual reality experiences.
Supply-chain issues have marred its recent results, but its subscriber base rose 52% from the prior-year period to 616,000 in the second quarter. A full 90% of their user base consists of free users, which points to an incredible opportunity for the company.
After the second quarter, its CEO RJ Pittman said that the firm still had a massive order backlog to fulfill in the upcoming quarter. Therefore, there’s healthy upside potential for MTTR stock ahead.
Coinbase Global (COIN)
Coinbase Global (NASDAQ:COIN) is one of the leading cryptocurrency exchanges, with over 100 million verified users. In April last year, it became a publicly-traded business through its IPO. The company has struggled since then, but it’s still head and shoulders above its competition regarding the trading volume and user base.
Naturally, the company has been struggling to get going in the ‘crypto winter.’ Second quarter results for its business were down remarkably from the prior-year period.
The exchange stated in its shareholder letter, “a shift in customer and market activity, driven by macroeconomic and crypto credit factors alike.”
The crypto markets won’t be down in the doldrums forever, and once they start picking up momentum again, so will COIN stock.
Roblox (RBLX)
Metaverse gaming company Roblox (NYSE:RBLX) turned heads during the pandemic with its spectacular subscriber and revenue growth numbers.
With the behavioral shifts in the post-pandemic world, though, things have been moving south for the business. The company still is poised to succeed in the long run when the metaverse concept goes mainstream. Its numbers from July suggest that investor concerns are a bit overblown.
The second quarter results were rough despite the double-digit growth in sales. On the upside, bookings (direct purchases of its in-game currency Robux) dropped 4% during the quarter. Considering it generates nearly 50% of its sales from Roblox, the decline is a major cause for concern.
The platform reported 8% to 10% growth in bookings, with a 26% increase in daily active users to 58.5 million in July. With the stock down more than 60% year-to-date, it’s significantly more attractive at current levels.
Unity Software (U)
Unity Software (NYSE:U) is a 3D content creation platform known as a top video game engine.
Its leadership position in its niche has enabled it to grow rapidly over the past several years. Its revenues have grown by an incredible 43% on average over the past five years. Consequently, its stock has grown at a healthy pace alongside the growth in sales.
Growth rates have normalized considerably of late, prompting Unity to pursue new acquisition targets aggressively. IronSource is perhaps its biggest acquisition in recent months in boosting its software and app monetizing potential.
Apple’s iOS privacy updates have thrown off Unity’s advertising business, where the ironSource deal holds immense value. As we advance, it would be interesting how the acquisition could fix Unity’s advertising woes. However, it’s perhaps the best time to pick up Unity stock at a massive discount.
Nvidia (NVDA)
Semi-conductor giant Nvidia (NASDAQ:NVDA) had a rough second quarter where growth rates were substantially lower than market expectations and from past quarters.
Inventory issues from its partners have weighed down its top and bottom-line results. Moreover, the declines in gaming and crypto revenues have also contributed to revenue growth.
Nvidia’s long-term case remains firmly intact because of its impressive track record and incredible outlook. It has spread its tentacles in some of the most profitable verticals, including the autonomous vehicles market, edge computing, and the metaverse.
The worldwide graphics processing unit (GPU) market alone is set to grow by 33.6% through 2027. Nvidia has a hefty 21% control of the market. Additionally, its data center business continues to impress despite the headwinds. It wrapped up another quarter generating over 61% growth in sales.
DraftKings (DKNG)
DraftKings (NASDAQ:DKNG) is among the top online sportsbook operators in the U.S. It operates in 17 states and continues to grow each year.
DKNG has been a remarkably consistent business, generating revenues over the 50% mark in recent years.
Its second-quarter results showed a healthy 57% bump in sales to $466 million. Customer engagement levels were impressive, and its management raised its full-year sales guidance. Despite the troubling business conditions, it was able to grow at a healthy pace.
The legal sports betting market has been growing exponentially and is likely to grow by double digits for the foreseeable future.
CEO Jason Robin feels that the current market conditions have little impact on the platform’s spending. Hence, with the firm’s robust growth rates and expansion plans, DKNG stock remains an excellent bet over the long run.
General Motors (GM)
General Motors (NYSE:GM) is one of the biggest names in the automotive space. However, it has been struggling to grow top-line results in recent years, prompting a pivot towards an all-electric future.
GM fully embraces the EV future and plans to ditch its legacy combustion engine business. It has plans to invest over $35 billion in its EV efforts by 2025. Moreover, by 2035, it plans only to be producing EVs.
The focus on EVs will likely prove extremely beneficial to GM stock in the long run. It recently announced it was re-instating its dividend and increased its buyback capacity by a whopping $5 billion with a forward yield of close to 1%. Additionally, its stock has been trading at under 0.37 times forward sales.
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