ARK Invest’s robotics ETF has made a comeback, and these 2 stocks could drive the next leg of the rally – CNBC

Call it Cathie Woods' comeback.

ARK Invest's ARKQ autonomous technology and robotics ETF, one of her funds, has seen a turnaround in the past month, rallying by roughly 12%. Those gains were largely driven by top holding Tesla.

But, it's not the only stock in the ETF that has caught investors' attention. CNBC's "Trading Nation" asked two of its traders which name deserves a second look.

"One holding that's actually a small market cap company is Vuzix," Todd Gordon, founder of Inside Edge Capital Management, said Tuesday. "It popped 40% since Facebook's Oct. 28 announcement, going Meta. It's [now] pulling back. Support is around $10. If you actually look at a month-over-month rotation of all the holdings of that ARKQ, Vuzix is actually the strongest."

Vuzix develops and designs wearable augmented and virtual reality displays for industries ranging from manufacturing to telemedicine. Shares have surged 268% off a low set last November. The stock is up 38% this year.

"They also just got a big flood of orders from Australia and New Zealand, so you're getting repeat business. Company is negative; it's not making money right now. They have high SG&A expenses, but they're estimated to grow revenues from $15 million this year, $30 million next year and $40 million by 2023. Watch this one," said Gordon.

Eva Ados, chief investment strategist at ERShares, highlights data analytics software company Palantir as the stock she's backing.

"I like it for three reasons," Ados said during the same interview. "First of all, it has a great charismatic entrepreneur, [founder] Peter Thiel. Secondly, I like it because I can't think of a better defense company that will benefit from the new infrastructure bill. And the third reason why I like it is today's environment has a big emphasis on counterterrorism and defense, and that's the best platform to serve the intelligence community."

Palantir has underperformed markets this year, rising by just 10% compared with the ARKQ ETF's 15% gain. It went public in September last year, and at roughly $25, it still trades well above its reference price of $7.25.

"I think it's going to be a big winner for the rest of the year and into 2022," she said.

Disclosure: ERShares holds shares of Palantir.

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ARK Invest's robotics ETF has made a comeback, and these 2 stocks could drive the next leg of the rally - CNBC