In this piece, we will cover Cathie Wood’s 10 Stock Picks with Huge Upside Potential.
In a CNBC Squawk Box Interview on January 16, 2026, Cathie Wood outlined her outlook for 2026, a year in which she sees a concentrated set of stocks with significant upside potential.
The ARK Invest CEO looked back at 2025, discussing sharp volatility, trade turmoil in April, and the government shutdown. Despite macroeconomic headwinds, ARK Invest funds ranked among Morningstar’s top performers.
The firm’s investment strategy played out well, as it aggressively reallocated capital toward the stocks in which it had greates confidence during corrections. With these moves, Cathie Wood emphasized valuations could stumble even if innovation-driven stocks remain strong in terms of performance, comparing the trend to the late 1990s and early 2000s.
Looking ahead, Wood expects valuation multiple compression in 2026, based on ARK’s bottom-up analysis. However, she remains constructive on the macro backdrop. She discussed falling oil and housing prices, homebuilders’ price cuts, and significantly lower labor-cost growth (1.2% YoY), with the most recent quarter turning negative. Wood argues that these factors provide evidence of the build-up of deflationary pressures.
Sector-wise, she favors technology most. In particular, she cited ARK’s five focus platforms: robotics, energy storage, artificial intelligence (AI), blockchain technology, and multi-omic sequencing in healthcare.
With this backdrop in mind, let’s now move on to our list of Cathie Wood’s 10 stock picks with huge upside potential.
Our Methodology
To curate the list of Cathie Wood’s 10 stock picks with huge upside potential, we scanned across ARK Investment Management’s 13-F filings, then narrowed down the list based on the upside potential of the stocks as of market close on February 2, 2026. We also ensured that these stocks have broad analyst coverage and strong hedge fund sentiment. To assess hedge fund sentiment, we relied on Insider Monkey’s hedge fund database, which tracks 978 stocks as of Q3 2025. The list is ranked in ascending order based on each stock’s upside potential.
We have added the performance of each stock from the end of Q3 2025 through February 2, 2026, providing readers with insight into how ARK Invest’s portfolio picks have performed to date.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
10. Block, Inc. (NYSE:XYZ)
Number of Hedge Fund Holders: 64
Upside Potential: 40.70%
Share Price Performance (Sep 30 – Feb 2): -16.42%
Block, Inc. (NYSE:XYZ) is one of Cathie Wood’s 10 stock picks with huge upside potential.
As of February 2, 2026, Block, Inc. (NYSE:XYZ) enjoys the confidence of 70% of analysts who remain bullish on the stock, with consensus indicating a 40.70% upside potential.
The most recent analyst opinion was from Cantor Fitzgerald on January 27, 2026, when the firm initiated coverage of Block, Inc. (NYSE:XYZ). The investment firm issued an ‘Overweight’ rating with an $87 price target. The firm’s confidence stems from the belief that the early stages of the company’s turnaround are largely complete and that operational momentum is beginning to build.
Cantor also reflected on Block’s new product initiatives, viewing them as evidence that the company’s innovation engine is firing on all cylinders. Thus, investor focus is shifting toward execution from restructuring, the analyst noted. The investment firm remains confident in the company’s medium-term guidance, though it cautions that a sustained stock re-rating remains contingent on Block, Inc. (NYSE:XYZ)’s ability to deliver consistent performance across its growing ecosystem.
Meanwhile, on January 22, 2026, Reuters reported that Citigroup analysts are increasingly favoring U.S. fintechs, with the sector gaining relative advantage as Washington takes a turn toward a more affordability-driven agenda for the November 2026 midterm elections. As policy pivots toward consumer-friendly credit and small-business services, Citi views Block, Inc. (NYSE:XYZ) as a key beneficiary. Following the stock’s more than 23% decline in 2025, the firm indicates a potential sentiment recovery if the company’s execution improves amid a more favorable regulatory environment.
Block, Inc. (NYSE:XYZ) focuses on developing integrated financial ecosystems through Square and Cash App. The company offers payments, software, hardware, and consumer financial tools, including peer-to-peer payments, cards, and investing services.
9. GitLab Inc. (NASDAQ:GTLB)
Number of Hedge Fund Holders: 51
Upside Potential: 41.40%
Share Price Performance (Sep 30 – Feb 2): -21.58%
GitLab Inc. (NASDAQ:GTLB) is one of Cathie Wood’s 10 stock picks with huge upside potential.
On January 23, 2026, TipRanks reported that speculation around potential technology-sector consolidation is emerging. Citing Barron’s column by Jacob Sonenshine, the source cited a batch of software companies that could emerge as buyout candidates. With investors looking for opportunities to benefit from deal-related upside, GitLab Inc. (NASDAQ:GTLB) was included on the list of buyout candidates, alongside C3 AI, Bill Holdings, and Datadog. Previously, Reuters reported that exploratory sale discussions were taking place across parts of the sector in November 2025. At present, strategic buyers are increasingly active as valuation resets and platform-scale assets come into focus.
Meanwhile, the company reported product momentum earlier in the month, announcing on January 15, 2026, the general availability of its GitLab Duo Agent Platform. With this move, the company expands agentic AI capabilities across the DevSecOps lifecycle and targets the so-called AI productivity paradox by extending automation beyond code generation into planning, security, CI/CD, and code review workflows. With this platform, GitLab Inc. (NASDAQ:GTLB) integrates prebuilt, customer, and external AI agents within its DevOps workflows. At the same time, a new usage-based credit model reduces adoption friction for existing customers.
With its intelligent DevSecOps platform, GitLab Inc. (NASDAQ:GTLB) helps organizations plan, build, secure, and deploy software faster. As a result, the company improves developer productivity, operational efficiency, and security compliance across the entire software development lifecycle.
8. AeroVironment, Inc. (NASDAQ:AVAV)
Number of Hedge Fund Holders: 37
Upside Potential: 46.50%
Share Price Performance (Sep 30 – Feb 2): -14.26%
AeroVironment, Inc. (NASDAQ:AVAV) stands out as one of Cathie Wood’s 10 stock picks with huge upside potential.
As of February 2, 2026, nearly all analysts covering AeroVironment, Inc. (NASDAQ:AVAV) remain bullish, with a 46.50% consensus upside potential. Analyst sentiment remains strong amid a series of developments late in January that further draw investor attention to the stock.
On January 28, 2026, KeyBanc turned its attention to AeroVironment, Inc. (NASDAQ:AVAV), raising its price target from $285 to $330, while reiterating an ‘Overweight’ rating. The update came as the firm revised its outlook on space and defense technology stocks following recent events and headlines. KeyBanc expects the attractive macro environment to persist through 2026, supporting growth opportunities and potential re-ratings across the group.
On the same day, AeroVironment, Inc. (NASDAQ:AVAV) announced that its UES division was awarded a $75 million U.S. Air Force task order under the Functional Responsive Experimentation for Systems and Humans (FRESH) program. With the 60-month contract, the company expands its ongoing work with the Air Force Research Laboratory. The company will focus on biotechnology, advanced polymers, responsive materials, and AI-enabled research to modernize air, space, and weapons systems.
AeroVironment, Inc. (NASDAQ:AVAV) focuses on designing and producing multi-domain robotic systems. The company also conducts advanced customer-funded research through its MacCready Works segment for defense and aerospace applications.