Why Tesla Bull Cathie Wood Is Betting This Stock, Dubbed 'Stay At Home' Play By Many, Will Win Big

Popular star picker and Tesla Inc. TSLA bull Cathie Wood, who runs Ark Investment Management, said on Sunday that Zoom Video Communications Inc ZM, will "win big" in its sector despite bearish analyst calls on the videoconferencing firm.

What Happened: Wood has been piling up shares in Zoom, though she has recently taken an opposite stance in other work-from-home stocks such as Netflix Inc NFLX and Docusign Inc DOCU.

Naysayers lump Zoom $ZM into profit less tech, concept capital, stay at home stocks. Along with Microsoft, we believe that Zoom will be a prime beneficiary of the first “rip and replace” cycle since the early nineties in the $1.5 trillion global enterprise communications space. https://t.co/2IJ8WICB1D

— Cathie Wood (@CathieDWood) May 8, 2022

Work-from-home stocks got a big boost in 2020 following COVID-19 lockdowns, though analysts have recently slashed their estimates significantly as economies and offices reopen.

“WFH poster childs (Netflix, Zoom, Docusign, etc.), and frothy low-quality tech names continue to see dark days ahead as a pull forward growth and a normalizing economy play out in the summer timeframe and beyond,” Wedbush analyst Dan Ives wrote in a note last week.

Wood’s WFH Bets: The stock picker exited Netflix earlier this year and has recently been selling shares in Docusign. Ark Invest held 8.46 million shares of Zoom, worth $853 million based on Friday’s close. 

The stock picker has also been betting on other cloud-based videoconferencing firms such as Five9 and RingCentral Inc RNG, which also received a boost from pandemic curbs. 

See Also: Cathie Wood's Ark Is Now Completely Out Of Netflix

Zoom competes with bigger rivals such as Microsoft Corp MSFT-led Teams, and Alphabet Inc GOOGL GOOG-owned Google Chat allows users to make calls via the apps downloaded on their phones.

Wood has also been buying shares in Roblox Corp RBLX and Roku Inc ROKU

Price Action: Zoom closed 4.4% lower at $96.38 on Friday. The stock is down 48% year-to-date and 83% since hitting the pandemic highs in October 2020.