Why Cathie Wood Continues To Buy Zoom Video's Stock As It Falls

The ARK Innovation ETF ARKK has been trending lower over the last month as selling pressure builds in growth and innovation stocks.

Ark Invest founder and CEO Cathie Wood thinks innovative names are falling out of favor as they did during the COVID-19 pandemic and she is buying the weakness once again.

"Innovation solves problems," Wood said Wednesday on CNBC's "Squawk Box."

There are a lot of lingering problems from the pandemic including supply chain issues and labor shortages, but innovation is helping to solve those problems, she said.

One stock the Ark Invest CEO is continually buying as it falls is Zoom Video Communications Inc ZM.

See Also: Zoom Video Analysts React To Slowing Growth, Valuation Reset After Big Stock Drop

For the first time in decades, the communications system of the world is going to be replaced, Wood said.

"Many people think of Zoom simply as a video chat service—it is not. It is becoming a unified communication system."

She told CNBC that when she participates in a video call, she is relieved when it's on Zoom's platform because she knows it's going to work correctly.

The communications part of the tech stack is $1.5 trillion globally and Zoom is a $4 billion revenue company right now, Wood said.

"So we think it has miles to go," she said. "I think this is one of the most important communications companies to come along in many decades."

Disruptive innovation represents between $10 trillion and $15 trillion in the global public marketplace. In 10 years, Wood believes disruptive innovation will grow to about $200 trillion.

ZM Price Action: Zoom has traded as high as $486.83 and as low as $195.80 over a 52-week period.

The stock was down 0.76% at $205.06 Wednesday morning.

Photo: courtesy of Zoom.