{"id":465268,"date":"2021-05-05T04:15:43","date_gmt":"2021-05-05T08:15:43","guid":{"rendered":"https:\/\/financhill.com\/blog\/?p=465268"},"modified":"2021-04-28T21:29:23","modified_gmt":"2021-04-29T01:29:23","slug":"why-does-cathie-wood-like-square","status":"publish","type":"post","link":"https:\/\/financhill.com\/blog\/investing\/why-does-cathie-wood-like-square","title":{"rendered":"Why Does Cathie Wood Like Square?"},"content":{"rendered":"<p><span style=\"background-color: transparent; color: #000000;\"><em>Why Does Cathie Wood Like Square?<\/em> Some leaders in the financial services industry would be forgiven for thinking that Cathie Wood can see the future. However, there is nothing mystical about her gift. She puts in the hours to research new technology and cutting-edge businesses so she can predict the large-scale impact of disruptive innovation.&nbsp;<\/span><\/p>\n<p><span style=\"background-color: transparent; color: #000000;\">Wood\u2019s research gives her deep insight into which companies and industries will profit from technological advances. She uses that insight to make investment decisions for her ARK family of funds &#8211; a collection that includes six actively managed ETFs:&nbsp;<\/span><\/p>\n<ul>\n<li><strong><span style=\"background-color: transparent;\">Innovation ETF (<a href=\"https:\/\/financhill.com\/search\/stock-score\/ARKK\">ARKK<\/a>)&nbsp;<\/span><\/strong><\/li>\n<li><strong><span style=\"background-color: transparent;\">Autonomous Technology &amp; Robotics ETF (<a href=\"https:\/\/financhill.com\/search\/stock-score\/ARKQ\">ARKQ<\/a>)<\/span><\/strong><\/li>\n<li><strong><span style=\"background-color: transparent;\">Next Generation Internet ETF (<a href=\"https:\/\/financhill.com\/search\/stock-score\/ARKW\">ARKW<\/a>)<\/span><\/strong><\/li>\n<li><strong><span style=\"background-color: transparent;\">Genomic Revolution ETF (<a href=\"https:\/\/financhill.com\/search\/stock-score\/ARKG\">ARKG<\/a>)<\/span><\/strong><\/li>\n<li><strong><span style=\"background-color: transparent;\">FinTech Innovation ETF (<a href=\"https:\/\/financhill.com\/search\/stock-score\/ARKF\">ARKF<\/a>)&nbsp;<\/span><\/strong><\/li>\n<li><strong><span style=\"background-color: transparent;\">Space Exploration &amp; Innovation ETF (ARKX)<\/span><\/strong><\/li>\n<\/ul>\n<p><iframe loading=\"lazy\" style=\"margin: 0 auto; border: 0;\" src=\"https:\/\/financhill.com\/widget\/charts\/ARKF?defaultOverlays=EMA5%2CEMA20%2CSMA20%2CSMA200&amp;defaultIndicators=RSI14&amp;periodGrouping=daily&amp;defaultSeries=candlesticks\" width=\"720\" height=\"500\" frameborder=\"0\" scrolling=\"no\" seamless=\"\"><\/iframe><\/p>\n<p><span style=\"background-color: transparent; color: #000000;\">So far, ARK investors are pleased with their returns. Wood has made one smart move after another. She is a big believer in Bitcoin and Tesla, and lately, she has been talking up <strong>Square (<a href=\"https:\/\/financhill.com\/search\/valuation\/SQ\">SQ<\/a>)<\/strong>. In financial circles, this attracted a lot of attention. Everyone wants to know &#8211; why does Cathie Wood like Square?&nbsp;<\/span><\/p>\n<h2><strong style=\"background-color: transparent; color: #000000;\">What Is Cathie Wood&#8217;s Investing Philosophy?<\/strong><\/h2>\n<p><span style=\"background-color: transparent; color: #000000;\">Before she launched ARK Invest in 2014, Cathie Wood spent decades in the financial services industry. Over time, she noticed patterns &#8211; particularly as they relate to disruptive innovation.&nbsp;<\/span><\/p>\n<p><span style=\"background-color: transparent; color: #000000;\">As the technology of today is retired in favor of options that are faster, more efficient, and more effective at solving big problems, some companies and industries fade away. The companies that can\u2019t keep up are replaced by startups that enter the market ready to capitalize on enhanced technology or businesses that flex and adapt to a rapidly changing world.&nbsp;<\/span><\/p>\n<p><strong><span style=\"background-color: transparent; color: #000000;\">Cathie Wood\u2019s investing philosophy is simple: identify the companies and industries poised to win big based on technological developments.&nbsp;<\/span><\/strong><\/p>\n<p><span style=\"background-color: transparent; color: #000000;\">For the moment, Wood\u2019s research has pointed her to five areas of opportunity: <\/span><\/p>\n<ul>\n<li><strong><span style=\"background-color: transparent; color: #000000;\">artificial intelligence, <\/span><\/strong><\/li>\n<li><strong><span style=\"background-color: transparent; color: #000000;\">robotics, <\/span><\/strong><\/li>\n<li><strong><span style=\"background-color: transparent; color: #000000;\">DNA sequencing, <\/span><\/strong><\/li>\n<li><strong><span style=\"background-color: transparent; color: #000000;\">energy storage, and <\/span><\/strong><\/li>\n<li><strong><span style=\"background-color: transparent; color: #000000;\">blockchain technology. <\/span><\/strong><\/li>\n<\/ul>\n<p><span style=\"background-color: transparent; color: #000000;\">Every asset in her six funds can be traced up to those innovations &#8211; some more directly than others. So how does <strong>Square (<a href=\"https:\/\/ark-invest.com\/articles\/analyst-research\/square-valuation\/\" target=\"_blank\" rel=\"noopener\">SQ<\/a>)<\/strong> fit in? Specifically, why did Cathie Wood buy Square?&nbsp;<\/span><\/p>\n<h2><strong style=\"background-color: transparent; color: #000000;\">Why Did Cathie Wood Buy Square?<\/strong><\/h2>\n<p><span style=\"background-color: transparent; color: #000000;\">Square might not have been the very first into the digital payments space, but it rapidly established a leading position in the industry. It\u2019s growing fast, and Cathie Wood expects that growth to continue. In fact, Square stock makes an appearance in several of her ETFs.&nbsp;<\/span><\/p>\n<p><span style=\"background-color: transparent; color: #000000;\"><strong>ARK Invests\u2019 FinTech Innovation ETF (ARKF)<\/strong> is particularly&nbsp;pro-Square. As of April 28, 2021, ARKF owns 1,704,391 shares valued at roughly $433 million. That represents nearly 10 percent of the fund\u2019s total holdings.&nbsp;<\/span><\/p>\n<p><iframe loading=\"lazy\" style=\"margin: 0 auto; border: 0;\" src=\"https:\/\/financhill.com\/widget\/fundamentals\/SQ?defaultTimespan=quarter&amp;defaultType=revenue\" width=\"720\" height=\"400\" frameborder=\"0\" scrolling=\"no\" seamless=\"\"><\/iframe><\/p>\n<p><span style=\"background-color: transparent; color: #000000;\"><strong>Cathie Wood decided to buy Square because it is on the cutting-edge of disruptive and innovative payment solutions<\/strong>. <\/span><\/p>\n<p><span style=\"background-color: transparent; color: #000000;\">In addition to transforming traditional merchant services and opening digital payments up to merchants of all sizes, <strong>Square has embraced cryptocurrency &#8211; and Wood is convinced that cryptocurrency is on the cusp of widespread adoption.&nbsp;<\/strong><\/span><\/p>\n<h2><strong style=\"background-color: transparent; color: #000000;\">Cathie Wood SQ Price Target<\/strong><\/h2>\n<p><span style=\"background-color: transparent; color: #000000;\">Square isn\u2019t resting on its current success. It is constantly exploring new opportunities to expand its services and its consumer reach. That\u2019s why it holds a place of honor in Cathie Wood\u2019s funds.&nbsp;<\/span><\/p>\n<p><iframe style=\"width: 100%; height: 418px; margin: 0 auto; border: 0;\" src=\"https:\/\/financhill.com\/valuation\/SQ\" frameborder=\"0\" scrolling=\"no\" seamless=\"\"><\/iframe><\/p>\n<p><span style=\"background-color: transparent; color: #000000;\">Cathie Wood\u2019s SQ price target projects significantly more growth from current levels. She expects SQ share price to hit $500 or more by 2025.&nbsp;<\/span><\/p>\n<h2><strong style=\"background-color: transparent; color: #000000;\">Is Cathie Wood Wrong About Square?<\/strong><\/h2>\n<p><span style=\"background-color: transparent; color: #000000;\">Square displays all the signs of substantial growth as the decade progresses, but that is no guarantee that investors will realize returns. While Cathie Wood has been firm in her support of Square, even the most experienced fund managers can make a misstep.&nbsp;<\/span><\/p>\n<p><span style=\"background-color: transparent; color: #000000;\">So, is Cathie Wood wrong about Square? The most reputable analysts say no. They agree that&nbsp;Square is well-positioned for exceptional long-term growth. <\/span><\/p>\n<p><span style=\"background-color: transparent; color: #000000;\">The biggest risk is a bit of short-term volatility. That\u2019s normal &#8211; particularly in the world of digital payment solutions.&nbsp;<\/span><\/p>\n<p><iframe loading=\"lazy\" title=\"Future of Finance with Square&#039;s Jackie Reses | #BIS2020\" width=\"660\" height=\"371\" src=\"https:\/\/www.youtube.com\/embed\/tgeSOIWVYc8?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/p>\n<h2><strong style=\"background-color: transparent; color: #000000;\">How High Could Square Go?<\/strong><\/h2>\n<p><span style=\"background-color: transparent; color: #000000;\">Cathie Wood\u2019s projected $500+ Square stock price is intended to cover the next four years of growth. For those wondering how high could Square go in the coming 12 months, the projection is a bit&nbsp;less dramatic.&nbsp;<\/span><\/p>\n<p><span style=\"background-color: transparent; color: #000000;\">Square stock gained 212 percent over the last 12 months, primarily driven by changes in consumer behavior due to the pandemic. That is unlikely to be such a significant factor in the next 12 months. Still, <strong>a majority of analysts say Square stock is a buy with an average target price of $272 per share.&nbsp;<\/strong><\/span><\/p>\n<p><span style=\"background-color: transparent; color: #000000;\">Some, like Cathie Wood, are more optimistic. On the high end, one analyst says $380 per share is a reasonable expectation. Of course, there are naysayers who strongly believe Square is overvalued. They expect a correction, with share prices dropping as low as $155 by April 2022.&nbsp;<\/span><\/p>\n<h2><strong style=\"background-color: transparent; color: #000000;\">Conclusion: Why Does Cathie Wood Like Square?&nbsp;<\/strong><\/h2>\n<p><span style=\"background-color: transparent; color: #000000;\">The bottom line is that Square has all the elements an investor wants in a disruptive, innovative company. Square\u2019s management team are prepared to make bold moves to boost business, and they focus resources on enhancing products and services to hold their place as the first to move on technological advancements.&nbsp;<\/span><\/p>\n<p><span style=\"background-color: transparent; color: #000000;\"><strong>Square did particularly well in 2020, primarily because its CashApp peer-to-peer funds transfer service took off. It is now moving into tax preparation, music streaming, and cryptocurrency<\/strong> &#8211; all opportunities to expand its ecosystem and encourage continued growth.&nbsp;<\/span><\/p>\n<p><span style=\"background-color: transparent; color: #000000;\">If successful, Cathie Wood\u2019s Square price target could be on the low side. Simply matching 2020\u2019s growth over the next 12 months could take Square shares past the $500 mark.&nbsp;<\/span><\/p>\n<p><iframe loading=\"lazy\" style=\"margin: 0 auto; border: 0;\" src=\"https:\/\/financhill.com\/widget\/fundamentals\/SQ?defaultTimespan=quarter&amp;defaultType=earnings\" width=\"720\" height=\"400\" frameborder=\"0\" scrolling=\"no\" seamless=\"\"><\/iframe><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Why Does Cathie Wood Like Square? Some leaders in the financial services industry would be forgiven for thinking that Cathie Wood can see the future. However, there is nothing mystical about her gift. She puts in the hours to research new technology and cutting-edge businesses so she can predict the large-scale impact of disruptive innovation.&nbsp; [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":465269,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"content-type":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[22],"tags":[],"class_list":["post-465268","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/financhill.com\/blog\/wp-content\/uploads\/2021\/04\/why-does-cathie-wood-like-square.jpg","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p9czeV-1X2k","_links":{"self":[{"href":"https:\/\/financhill.com\/blog\/wp-json\/wp\/v2\/posts\/465268","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/financhill.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/financhill.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/financhill.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/financhill.com\/blog\/wp-json\/wp\/v2\/comments?post=465268"}],"version-history":[{"count":6,"href":"https:\/\/financhill.com\/blog\/wp-json\/wp\/v2\/posts\/465268\/revisions"}],"predecessor-version":[{"id":465275,"href":"https:\/\/financhill.com\/blog\/wp-json\/wp\/v2\/posts\/465268\/revisions\/465275"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/financhill.com\/blog\/wp-json\/wp\/v2\/media\/465269"}],"wp:attachment":[{"href":"https:\/\/financhill.com\/blog\/wp-json\/wp\/v2\/media?parent=465268"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/financhill.com\/blog\/wp-json\/wp\/v2\/categories?post=465268"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/financhill.com\/blog\/wp-json\/wp\/v2\/tags?post=465268"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}