Cathie Wood’s ARK Invest ETFs were some of the hottest funds after 2020’s huge stock market gains. But those funds were hit hard in 2021 and again in 2022. Five ARK Invest stocks to watch are Coinbase, Roku, Block, Tesla stock and Zoom Video.
Is ARKK A Buy Right Now?
The ARK Invest investment company’s flagship fund is ARK Innovation ETF (ARKK). The ARKK ETF focuses on companies that exhibit “disruptive innovation,” a technologically enabled new product or service that potentially changes the way the world works.
The ARK Innovation ETF surged more than 152% in 2020, handily beating the Nasdaq’s hefty 43.6% return. But the ARKK ETF sharply underperformed the Nasdaq in 2021. For the year, the ARKK finished down 24% compared to the Nasdaq’s 21.4% advance. That underperformance continued into 2022 with the ARKK ETF down more than 57% through Sept. 21 compared to the Nasdaq’s 28.3% fall through the same period.
With the ARKK ETF about 70% off its 52-week high, the ETF is not a buy right now. Wait for the ETF to halt its current downtrend, form a new base and then break out past a correct buy point to indicate the proper time to buy. The ARKK ETF tumbled more than 4% Thursday.
Other ARK ETFs include Autonomous Technology & Robotics (ARKQ), Next Generation Internet (ARKW), Genomic Revolution (ARKG), Fintech Innovation (ARKF) and the recently debuted Space Exploration and Innovation (ARKX).
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The ARKK fund’s huge gain in 2020 resulted from big stock success stories in cutting-edge tech areas: DNA sequencing, robotics, artificial intelligence, energy storage and blockchain technology.
“Disruptive innovation is often not priced correctly by traditional investment strategies because people may not understand how big the ultimate opportunities are going to be. They aren’t sizing the opportunity and they aren’t analyzing the disruption,” Wood, the founder and CEO of ARK Invest, commented on the company’s website.
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ARK Invest Stocks To Watch
ARK Invest stocks to watch, and their tickers, include Coinbase Global (COIN), Roku (ROKU), Block (SQ), Tesla (TSLA) and Zoom Video (ZM).
|Company Name||Symbol||Closing Price||Weight In ARKK|
Source: ARK funds data as of Sept. 21, 2022
Cryptocurrency exchange Coinbase debuted on April 14, 2021 pricing at $250 a share. Coinbase stock closed its first day of trading 328.28, up 31.3%, for a valuation of $87.3 billion. COIN stock is trading more than 80% off its 52-week high.
COIN shares are sharply below their long-term 200-day benchmark. Coinbase stock dropped 7% Thursday.
The large stake in Coinbase represents another one of the Ark Invest stocks that offers more exposure to cryptocurrencies.
Zoom Video Stock
Zoom Video is the leader in modern enterprise video communications, with a cloud platform for video and audio conferencing, chat, and webinars across mobile, desktop, and room systems.
On Aug. 23, the company reported mixed July-quarter results. Third-quarter guidance missed Wall Street estimates amid weakness in consumer and small business sales.
On Thursday, Zoom stock was down 1.8%. Shares are about 74% off their 52-week high.
Roku stock is trading more than 80% off its 52-week high amid sharp weakness in recent months. On July 29, the streaming video platform posted a bigger-than-expected loss in the second quarter, missed its sales target, and offered weak guidance.
ROKU shares tumbled more than 7% Thursday.
Block is a digital payments and cryptocurrency leader. The stock is about 80% off its 52-week high and sharply below the 200-day moving average.
According to IBD Stock Checkup, Block stock shows a 21 out of a perfect 99 IBD Composite Rating. The IBD Composite Rating helps investors easily measure the quality of a stock’s fundamental and technical metrics.
On Aug. 5, the company reported June-quarter earnings and revenue that fell from a year earlier but beat estimates.
Block stock slid nearly 6% Thursday.
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Why Tesla Stock Is One Of The ARK Invest Stocks To Watch
Tesla stock is one of the top ARK Invest stocks, with whopping 10.8% weighting in the ARKK ETF portfolio. On April 13, Ark Invest modeled a $4,600 price target on the electric-vehicle giant. The valuation was published before Tesla’s 3-for-1 stock split on Aug. 24.
Tesla stock skidded 4.1% Thursday. TSLA shares are trying to find support around their 50-day line. A short base has a 314.74 buy point. Shares are about 30% off their 52-week high.
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