3 Cathie Wood stocks to buy the dip

By:
on Nov 23, 2021
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  • Cathie Wood stocks have lagged the market this year.
  • The Ark Innovation Fund has crashed by more than 35% from its all-time high.
  • We explain the contrarian case for Square, Zoom Video, and Coinbase.

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Cathie Wood stocks have not done well this year. The Ark Innovation Fund (NYSE: ARKK) has dropped by more than 35% from its highest level this year. Worse, most of its biggest constituent companies like Zoom Video, Teladoc Health, Square, and Spotify have crashed by double-digits from their YTD highs. Here are some of the best Cathie Wood stocks to buy as 2021 ends.

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Square 

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Square (NASDAQ: SQ) is a fast-growing payment processing company. The firm provides different services, including the popular Cash App platform. It also helps sellers accept payments. Most importantly, it owns Square Capital, a product that provides loans to small businesses. The Ark Innovation Fund has a stake in Square worth more than $700 million.

Square stock price has had a difficult time this year as investors predict that its growth will continue slowing down. Many investors also believe that its giant acquisition of Afterpay will not add significant value to the company. As such, it has dropped by more than 27% from its highest level this year. It is also trading at the lowest level since May this year.

Still, there is a possibility that the Square stock price will rebound. For one, the company is still seeing impressive growth across its core business. It also has a strong market share across its segments and I believe that AfterPay will help to boost growth in the coming years.

Square stock

Zoom Video

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The Ark Innovation Fund owns a stake in Zoom Video (NASDAQ: ZM) worth more than $960 million. The stock was one of the best performers in the fund in 2020. 

This year, however, the stock has crashed by more than 65% from its highest level this year. This happened as investors remained concerned about the company’s growth as the pandemic ends.

Still, there is a contrarian case for the Zoom stock price. For one, as the company demonstrated on Monday, its growth is still strong. The company’s revenue jumped by more than 30% from the same quarter last year.

The company has a good brand name, a strong market share, and recurring revenues. It also has a chance to grow its ARPU by adding more products. Therefore, in the next few years, I suspect that the stock will be substantially higher than the current level.

Zoom Stock Price

Coinbase 

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The ARKK fund has a stake in Coinbase (NASDAQ: COIN) worth more than $1.1 billion. Besides, Cathie Wood is one of the most bullish investors on Bitcoin. Still, the Coinbase stock price has crashed by almost 30% from its highest level this year.

Like Zoom, there is a contrarian case for Coinbase especially if you believe that Bitcoin prices will continue rising in the long term. Also, the company has a strong market share in the industry. It also has more room to grow as more institutional investors turn to cryptocurrencies to find growth. Therefore, the COIN stock price will likely bounce back.

Coinbase stock price
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