Cathie Wood Goes Bargain Hunting: 3 Stocks She Just Bought

There are a few things you can count on as a growth investor. Volatility will be perpetual. Investing is a marathon, not a sprint. Oh, and Ark Invest co-founder, CEO, and Chief Investment Officer Cathie Wood will publish her daily ETF trades at the end of every trading day.

Wood was particularly busy on Thursday, adding to several stocks and selling a few others. Some of Ark Invest's more intriguing moves included adding to existing ETF positions in Palantir (NASDAQ: PLTR), Cerebras Systems (NASDAQ: CBRS), and Coinbase Global (NASDAQ: COIN). All three stocks moved slightly lower on Wednesday. Wood tends to build up her positions on down days, so that's not a surprise. Let's take a closer look.

Image source: Getty Images.

1. Palantir

For a few years, Palantir stock could do no wrong. Shares of the analytics software provider would go on to more than double in each of the last three years, but it has proven mortal since peaking in early November. The stock has now fallen 48% from that all-time high.

Palantir's business is still growing, accelerating at a feverish pace. The same company that saw its revenue increase 17%, 29%, and 56% in the last three years, respectively, continues to step up its productivity. Palantir's top line rose 70% in the fourth quarter of last year, followed by an 85% jump in the first quarter of this year.

Its AI-propelled automation solutions have been a hit with the government and other public sectors from the start. These days it's also finding growth opportunities in the private sector, helping give commercial businesses a tech advantage.

Palantir has just posted the two strongest quarters of revenue growth since going public six years ago. The story is even better on the bottom line. Earnings have more than doubled for five consecutive quarters, more than quadrupling in its latest report. The shares are heading in the other direction.

Palantir is getting cheaper as the company is getting better, and that could be a smart contrarian bet. It's now trading for 74 times this year's earnings and 52 times next year's adjusted profit target. This might not seem cheap, but these multiples were well into the triple digits just a few months ago. Palantir is currently growing faster than its current multiples.

2. Cerebras Systems

As one of last month's most celebrated IPOs, Cerebras initially timed its market debut well. The AI architecture play had to raise its offering price to $185 for its mid-May debut, and even then, it still wasn't enough. Cerebras would open at $350 on its first day of trading, but it's been largely downhill since then. The stock has surrendered more than half of its May 14 peak value, and this week it officially became a broken IPO.

With Cerebras seemingly out of favor, like Palantir, it could be a good time to view the stock as a contrarian play. The bull case is impressive. Cerebras is pioneering an AI chip architecture that opts for a much larger GPU with a continuous sheet of silicon instead of wiring hundreds, if not thousands, of chips together.

It posted its first quarter as a public company this week, and it didn't go well. Revenue soared 94%, seemingly a blowout, but it came on thinning margins. It also didn't help that nearly three-quarters of its sales for the quarter went to just two clients in the UAE. The concentration risk is real. An order backlog approaching $25 billion is huge for a company with trailing revenue of $604 million, but $20 billion of that is a multiyear deal with OpenAI.

3. Coinbase

This brings us to Coinbase stock. Like Palantir and Cerebras, shares of the leading online trading platform for digital currencies tumbled at least 5% on Thursday. It has also been cut in half from its 52-week high. Coinbase hit another fresh low on Friday.

This is naturally a very different play than the other two AI-propelled tech stocks. Coinbase is struggling as interest in cryptocurrencies wanes. Bitcoin has fallen 45% over the past year. Revenue has declined 22% and 31% in its last two quarters, and as a scalable business, its profitability is taking a bigger hit. The stock bouncing from today's two-year low is a crypto rally away, but that's easier said than done.

Rick Munarriz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bitcoin and Palantir Technologies. The Motley Fool recommends Coinbase Global. The Motley Fool has a disclosure policy.