Cathie Wood Goes Shopping: 3 Stocks She Just Bought
Key Points
Nvidia shares have nearly doubled off their springtime lows, but Ark Invest is still adding to the country's most valuable publicly traded company.
Iridium is cranking out uninspiring revenue gains, but the bottom line is a better story.
Teradyne has seen back-to-back weeks of analyst downgrades, but Cathie Wood sees an opportunity.
- 10 stocks we like better than Nvidia ›
It's been a great year for the co-founder and CEO of Ark Invest to get her groove back. Cathie Wood's largest exchange-traded fund is now up 31% this year, well ahead of the three major market indexes that are sporting single-digit-percentage gains in 2025. Wood publishes Ark's daily transactions at the end of every trading day. What's she buying now?
Nvidia (NASDAQ: NVDA), Iridium Communications (NASDAQ: IRDM), and Teradyne (NASDAQ: TER) are three of the more interesting stocks that Ark bought on Wednesday. Wood was adding to existing positions in all three names. Let's take a closer look.
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1. Nvidia
You can't stop the artificial intelligence (AI) revolution, something that has catapulted Nvidia to the market cap crown among U.S. exchange-listed stocks. The developer of graphics processing units and AI chips became the first company to top $4 trillion in market capitalization this summer, notching another all-time high this week.
Nvidia investors weren't as giddy earlier this year. The shares would shed more than a third of their value in 2025 by the time Nvidia bottomed out. A one-two punch -- initially triggered by news of a Chinese AI start-up announcing that it could deliver respectable generative AI without using Nvidia's latest chips and then culminating in export restrictions into China for its high-end H20 chips -- fueled the sell-off, but the comeback story was as fast as some of the company's chips.
Image source: Getty Images.
Nvidia has braced investors to expect billions in quarterly charges stemming from its inability to move H20 chips into the country with the world's second-largest economy. However, there is some light at the end of that trade war tunnel. U.S. Commerce Secretary Howard Lutnick told Reuters this week that resuming H20 sales is a bargaining chip in negotiations with China in order to get more essential rare-earth elements going the other way.
It also seems that the initial cheap AI threat of China's DeepSeek was overblown. Nvidia saw its revenue surge a better-than-expected 73% its latest quarter. Analysts see Nvidia revenue and earnings per share soaring 52% and 47% respectively, when it reports financial results next month. The shares have gone on to nearly double since its April lows. It's just another win for the country's most valuable publicly traded company, a scintillating 10-bagger over the past three years.
2. Iridium Communications
Iridium hasn't had the same dramatic recovery as Nvidia, but it is clawing its way back to its recent highs. The data and voice satellite communications specialist also isn't growing as quickly as the company wearing the market cap crown, but its business is improving. Iridium was serving more than 2.4 million total billable subscribers by the end of March, a 5% increase over the past year. It will provide its second-quarter results next week.
Growth is being fueled by gains in commercial Internet of Things. Top-line growth hasn't been very impressive. Iridium has clocked in with just one year of double-digit revenue growth over the past six years. However, its bottom line is making a more dramatic recovery. Analysts see Iridium's business growing at a modest 6% clip this year, slowing to 4% in 2026. However, they are also targeting a better-than-30% jump on the bottom line in each of those years. Margin improvement could drive its current yield of nearly 2% higher.
3. Teradyne
Business is starting to accelerate for Teradyne. The maker of chip-testing equipment saw its revenue rise 5% last year after back-to-back years of double-digit declines. It's starting to pick up the pace. Teradyne's top line has come through with double-digit gains in back-to-back quarters.
Wood might be early on Teradyne. Samik Chatterjee at J.P. Morgan downgraded the shares from overweight to neutral just hours after Ark added to its Teradyne stake. The analyst is concerned about customers holding back on investing in semiconductor equipment in this macro environment, but that would be a near-term setback that could lead to pent-up demand in the long run. Chatterjee is still raising the firm's price target to $102, a move that still has 11% of near-term upside to the current price.
Unfortunately this is the second downgrade Teradyne has seen this month. Wood loves her winners, but she also doesn't mind opportunistic nibbles on some of her laggards.
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JPMorgan Chase is an advertising partner of Motley Fool Money. Rick Munarriz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JPMorgan Chase and Nvidia. The Motley Fool recommends Teradyne. The Motley Fool has a disclosure policy.
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