Staff Reporter
Cathie Wood is making headlines again with her bold investment strategies, known for diverging from the crowd while keeping an eye on long-term potential.
This week, she made notable changes involving three key artificial intelligence (AI) stocks, a sector she believes will significantly reshape the global economy and generate substantial revenues for leading companies.
Wood has reduced her stake in one of her top-performing stocks, which has skyrocketed by 1,000% over the past three years, while increasing her investments in two other AI giants.
During multiple trading sessions this week, Wood sold shares of Palantir Technologies (PLTR), a provider of AI-driven software systems.
As of May 9, Palantir was her sixth-largest holding, comprising 6% of her flagship Ark Innovation exchange-traded fund (ETF).
Despite Palantir’s recent report showcasing impressive revenue growth and strong demand, Wood may have opted to lock in profits and reinvest in other opportunities.
The stock currently trades at about 200 times forward earnings estimates, which could impact its short-term performance.
Investing in AI Chip Leaders
On the buying side, Wood increased her shares in leading AI chip manufacturers Nvidia (NVDA) and Advanced Micro Devices (AMD) this past week.
Given the current valuations, this move aligns with her bargain-hunting approach. Nvidia is now trading at 26 times forward earnings estimates, a sharp decline from 50 times earlier this year. AMD, while experiencing a less dramatic drop, is still seen as a good value at 25 times forward earnings, down from over 30 times a few months ago.
Nvidia’s dominance in the AI chip market and its rapid innovation cycle position it as a key player for those invested in the AI growth narrative. The company has achieved record revenues and high profitability, backed by an ambitious product development roadmap.
Meanwhile, AMD is also making strides in the AI chip arena, with enough market space to thrive alongside Nvidia.
CEO Lisa Su recently noted that the company had an “outstanding start to 2025,” reporting double-digit increases in revenue and gross profit, along with a gross margin of 50%. AMD’s strengths in central processing units (CPUs) and AI for data center clients have fueled this growth.
As Wood continues to navigate the evolving AI landscape, her investment choices reflect a keen understanding of the market’s potential and a commitment to long-term success.
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