Cathy Wood’s ARK Investment firm is well known for making big wins with massive growth plays and it is no secret the popular investor is bullish on Bitcoin. The top cryptocurrency is now valued roughly $66,000 per share which is up roughly 115% in this year and Wood has stated the price may hit $500,000 sometime in the next five years.
For people seeking stocks with the same market-crushing ability, ARK Invest also has large holdings in some really promising growth stocks that may level up your portfolio.
Bitcoin is big, but interactive content may be bigger
Unity Software stands as the fourth biggest overall holding within Cathie Wood’s Ark Innovation ETF, and I believe the interactive-software creation company has good long term potential of crushing the stock market. The company is best known for its video game development services, however, Unity’s growth prospects expand well beyond gaming.
You may have heard that Facebook has changed its name to Meta Platforms which is a shift that reflects the social media giant’s ambitions to capitalize on the future growth of the “metaverse.” Technology’s largest players believe that virtual worlds will have a growing role in commerce, socialization, and everyday life, and Unity may be the key in helping this vision become a reality.
Facebook’s momentum is already really encouraging. Unity was able to grow its sales 48% year over year during the second quarter. Customers raised their spending by 42% compared to the prior year, and the software company has continued to bring in new, high-value clients. During the second quarter, 888 customers each made more than $100,000 in revenue, which is up from 716 the prior year. The growth story here is probably just getting started, and I think the company will deliver more powerful results throughout the rest of this year.
The software expert is providing the tools and the foundational framework that will allow its customers to build extremely engaging interactive experiences, and the future demand outlook for all of its services is very promising. Bitcoin may very well go on to make more huge gains, but I believe Unity stock may beat it within the next five years.
Coinbase may lead the next leg of crypto approval
Coinbase shares sold off last month when news came out that Cathie Wood sold almost 100 thousand shares of the crypto brokerage. Nevertheless, Wood is not losing faith. In fact, Coinbase is presently the third-largest stock in Wood’s ARK Innovation ETF and is over 6% of the ETF’s entire holdings. Put simply, Wood is still bullish on the crypto stock.
It is easy to see Coinbase as a risky brokerage that caters to day traders online but that is clearly a misperception. During the second quarter the company reported having over 9,000 institutional investors and this group had traded $317 billion in purchases on its platform, which was almost 70% of its entire trading volume. The optionality these current relationships have for more services to foster adoption is an overlooked part of Coinbase’s investment thesis.
Coinbase is leading the way when it comes to efforts to grow the cryptocurrency ecosystem. The company recently obtained platform Bison Trails which was renamed Coinbase Cloud. This platform allows companies to quickly insert the blockchain framework into their operations. Also, the company created the Crypto Council for Innovation along with Fidelity and Square to shape regulatory efforts.
In the near term Coinbase will probably rise and fall with crypto value but the crypto company has a unique opportunity to lead in the crypto adoption of the future. That is why Cathie Wood is really bullish on this stock.
Author: Steven Sinclaire