One Cathie Wood stock is most likely to go from $100,000 to $1 million over the next 20 years.

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There is no guarantee that any stock will make you a millionaire. However, this time the possibility seems quite high.

If you asked Cathie Wood what her favorite stock is, she’d probably say: tesla (TSLA -2.03%). The electric car maker ranks among Ark Investment Fund’s largest holdings.

But is Tesla the biggest potential revenue stream in Ark’s portfolio? Maybe. But I think there’s one other stock that really stands out. In my opinion, the Cathie Wood stocks that will most likely take him from $100,000 to $1 million over the next 20 years are:

many candidates

Picking just one stock from all of Wood’s holdings is not easy. There are plenty of candidates you can easily imagine giving him a 10x return over 20 years.

Tesla is definitely one of them. If the robotaxis market takes off as Ark Invest predicts, it could take Tesla less than 20 years to grow its initial investment of $100,000 to $1 million.

beam therapeutics Could be another big winner. Although the company is still in its early stages, its base editing technology (ultra-precise gene editing) could be a game-changer.

I really like wood UiPath recently. This up-and-coming AI stock ranks as his second-largest position at Ark Invest. I wouldn’t be surprised if UiPath’s robotic process automation technology really gains traction over the next decade or more.

Downside for many people

These aren’t the only stocks Wood owns that could become 10-baggers over the next 20 years. However, most of them have some drawbacks.

Many of the companies in Ark Invest’s portfolio are not yet profitable. This makes it difficult to assess corporate valuations with a high degree of reliability.

Most of these stocks are early in their lifecycles and therefore carry some risk. Beam is a good example. Some may not even last 20 years, let alone achieve 10x profits.

Of the Wood stocks that are already profitable, a significant number are trading at very high premiums. For example, Tesla’s forward earnings multiple is nearly 60 times. The stock price already has significant growth built into it.

Another thing shocked me. Although Wood focuses on innovators, many of the companies in her Ark Invest portfolio face considerable competition. If a stock has a strong moat, it is more likely to become a 10 bagger.

potential millionaire maker

I scoured the list of over 120 stocks in Ark Invest’s portfolio to find ones that don’t have those downsides. It’s already profitable. A solid business built for the long term. Prospects for big growth. reasonable evaluation. A solid moat. One came out on top. vertex pharmaceuticals (VRTX -0.92%).

Let’s start with Vertex’s moat. A major biotech company sells the only treatment that treats the root cause of cystic fibrosis (CF). Our closest competitors take years to bring their products to market.

This moat is directly tied to Vertex’s high profitability. Vertex made more than his $1.6 billion in profits in the first half of 2023, and his cash reserves amount to his $12.6 billion.

The company has leveraged the success of CF to build a strong pipeline. Vertex is already awaiting regulatory approval for Exacell for the treatment of rare blood diseases sickle cell disease and transfusion-dependent beta-thalassemia. The company appears to be in a position to apply for approval next year for its non-opioid painkiller VX-548 and a new banzacaftor-based combination that could be the most potent and profitable CF treatment to date.

Looking ahead just a few years, Vertex may launch another new product that will open up a huge market. The company is evaluating inaxaprine in a pivotal clinical study in APOL1-mediated kidney disease (AMKD). To illustrate this opportunity, CF affects an estimated 88,000 patients and AMKD affects approximately 100,000 patients. And there is currently no approved treatment for AMKD.

All of these pipeline candidates have blockbuster potential. They all also pass through early clinical stages, where the risk of failure is high. But there’s at least one early-stage program that could be huge for Vertex. The company believes he is on track to eventually develop a treatment for type 1 diabetes.

most likely to succeed

Is it certain that Vertex will turn $100,000 into $1 million over the next 20 years? No, there are no certainties when it comes to stock investing.

It’s also possible that even if Vertex achieves its goals, it may outperform other stocks in Ark Investment’s portfolio. But if I had to put my money into a Cathie Wood stock with the best chance of success, it would be Vertex.

Keith Speights works at Vertex Pharmaceuticals. The Motley Fool has positions in and recommends Beam Therapeutics, Tesla, UiPath, and Vertex Pharmaceuticals. The Motley Fool has a disclosure policy.



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