Stock Analysis & Ideas

U.S. Mid-Term Elections: Is Now the Time to Bet on Cathie Woods’ Top 2 Holdings?

Story Highlights

Cathie Woods’ top two holdings have lost substantial value in 2022. Favorable fiscal and monetary policies could give a boost to U.S. stocks.

ARK Innovation ETF’s (ARKK) top two holdings, including Zoom Video Communications (NASDAQ:ZM) and Tesla (NASDAQ:TSLA), have lost substantial value in 2022. Cathie Wood, the CEO of ARK Investment Management, has been criticizing the Fed’s rate hikes as tighter fiscal and monetary policies have weighed on high-growth tech stocks. Nevertheless, as the U.S. mid-term election results start rolling in, investors are hoping for market-friendly policies that could boost these stocks. 

But before you jump to any conclusions, let’s take a look at what TipRanks’ data suggests for these stocks.

Is Zoom Video a Buy?

Zoom offers video conferencing services and witnessed stellar demand during the pandemic. However, tough year-over-year comparisons, increased competition, currency headwinds, and fear of an economic slowdown and its impact on enterprise spending dragged its stock price lower. 

Zoom Video’s stock is down about 57% year-to-date. Meanwhile, on TipRanks, it has a Hold consensus rating based on six Buy, 17 Hold, and two Sell recommendations. Meanwhile, analysts’ average price target of $102.65 implies 31% upside potential. 

ZM stock has a positive signal from hedge funds. According to our data, hedge funds bought 4.9M ZM stock last quarter. Moreover, Zoom Video stock has an Outperform Smart Score of eight on 10.

Is Tesla stock a Buy, Sell, or Hold?

Supply-chain issues, higher battery and input costs, COVID-led headwinds in China, and competitive pricing pressure have weighed on Tesla stock. It has declined by about 46% year-to-date and underperformed the benchmark index. 

Given the challenges, TSLA stock has a Moderate Buy consensus rating on TipRanks based on 19 Buy, seven Hold, and four Sell recommendations. Further, analysts’ average price target of $302.05 implies 57.9% upside potential. 

TSLA stock has negative signals from hedge funds and insiders. According to our data, hedge funds sold 1.2M TSLA stock in three months. Meanwhile, insiders sold TSLA stock worth $10.8B during the same period. Overall, TSLA stock has an Underperform Smart Score of two on 10.

Bottom Line

Market-friendly policies will undoubtedly support the recovery of ZM and TSLA stocks. However, the company- and industry-specific headwinds, and a lack of near-term catalysts could continue to pose challenges.

Disclosure 

Tired of arriving late to the Big Returns Party?​
Most investors don’t have major gainers like TSLA or NVDA on their radar from the start.
The profusion of opinions on social media and financial blogs makes it impossible to distinguish between real growth potential and pure hype.
​​For the past decade, we have developed and perfected technology designed to help private investors, just like you, find the best opportunities, with the greatest upside potential, in any financial climate.​
Learn More