Analyst Consensus Points to Potential 50% or More Gains in Cathie Wood’s ARK Innovation
In the realm of Wall Street, Cathie Wood’s ARK Innovation ETF (ARKK) is known for its contrarian approach, fearlessly deviating from the norms set by the S&P 500. However, recent analyst consensus suggests that Wood’s stock picks within ARK Innovation might be in line for significant gains in 2024.
According to an analysis by Investor’s Business Daily using data from S&P Global Market Intelligence and MarketSmith, analysts are optimistic about eight stocks within ARK Innovation, predicting a surge of 50% or more over the next 12 months. This level of bullish sentiment surpasses the broader outlook for the S&P 500, where even the most optimistic strategists anticipate a more modest 9% increase this year.
While Wood’s strategy often goes against conventional wisdom, her success in 2023 has garnered significant attention. The ARK Innovation ETF closed the year with an impressive 67.64% total return, outperforming major counterparts such as the Invesco Nasdaq 100 ETF (QM) and the SPDR S&P 500 ETF Trust (SPY), which returned 55.0% and 26.2%, respectively.
As the market shifts into 2024, investors are keen to observe the performance of high-octane stocks favored by Wood, especially in the healthcare sector.
Analysts, on average, project nearly 30% gains for most of Wood’s picks in the 34-stock ARK Innovation portfolio over the next 12 months. Notably, they express particular enthusiasm for the healthcare sector, with five out of the eight stocks expected to see a 50% or more increase in value belonging to this category.
Among the healthcare standouts, Verve Therapeutics takes the lead. Although representing a relatively small 0.5% weighting in the ARK Innovation portfolio, analysts foresee an impressive 229% gain from the current stock price within the next 12 months. Verve Therapeutics focuses on gene-editing medicines primarily designed for heart disease and liver conditions, making it a speculative yet promising choice.
Intellia Therapeutics, another gene-editing treatment company in Wood’s portfolio, is also poised for substantial growth, with analysts predicting a jump of over 150% this year.
Shifting away from health care, analysts express optimism about 2U, an online education company, despite its minimal 0.09% position in ARK Innovation’s portfolio following an 80% drop in 2023. Analysts anticipate a remarkable 178% rise in the stock over the next 12 months, emphasizing Wood’s knack for identifying potential winners despite short-term setbacks.
While acknowledging the speculative nature of some of these investments, analysts believe that Wood’s investment philosophy encourages investors to pursue substantial gains by embracing higher-risk, higher-reward opportunities.
As the financial landscape continues to evolve in 2024, the spotlight remains on Cathie Wood and her ability to navigate the market, challenging traditional norms and potentially reaping substantial rewards for those willing to follow her lead.