Cathie Wood Goes Bargain Hunting: 3 Stocks She Just Bought
Key Points
Ark Invest added to its stakes in Amazon, DraftKings, and Block on Thursday.
Amazon is the worst performer among the "Mag 7" this year, as tariff concerns and slow growth weigh on the e-tailer.
DraftKings is being disrupted by the event-based predictions market boom.
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If there's anyone who needed a good year it's Cathie Wood. The founder, CEO, and portfolio manager of Ark Invest has struggled since generating monster returns in 2020. She started getting back on track last year, and she's crushing the market across her exchange-traded funds (ETFs) in 2025.
She was busy buying stocks on Monday. Ark Invest added to existing positions in Amazon (NASDAQ: AMZN), DraftKings (NASDAQ: DKNG), and Block (NYSE: XYZ). All three stocks are losing badly to the market in 2025. Let's take a closer look.
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1. Amazon
Reuters is reporting that Amazon is laying off as many as 30,000 corporate employees this week. Wood is buying, while Amazon may be selling (its payroll, at least). These are being called the largest layoffs in Amazon history, but it amounts to less than 2% of its 1.54 million workforce.
Amazon isn't the first of the "Magnificent Seven" to roll with pink slips in 2025. It is this year's worst performer of the seven most valuable market bellwethers, with its market-lagging 3% year-to-date return. The e-commerce and cloud-hosting giant didn't do itself any favors with the high-profile Amazon Web Services (AWS) outage earlier this month.
Image source: Getty Images.
The reported layoffs won't be the only news that Amazon investors will be watching this week. It reports its third-quarter results on Thursday afternoon. If the Mag 7 stock doesn't want to be last in line, it will need to prove that it can break through with a strong report detailing how it fared this past summer.
Growth has been steady but uninspiring for Amazon. Net sales have risen between 9% and 12% in each of the previous three years. It's been more of the same in 2025, and analysts see 11% top-line growth this year followed by a 10% increase for all of 2026.
Its high-margin AWS segment is growing faster than Amazon's overall business. The same can be said of its international e-commerce business. Amazon's sluggishness is coming largely from its domestic business, and near-term tariff concerns are only making investors more cautious in approaching Amazon as an investment this year. Are the layoffs a precursor to a weak report or is Amazon just rightsizing its organization? This is going to be a busy week for the world's largest online retailer, and Wood doesn't mind trying to get in ahead of a major event that should move the stock one way or the other.
2. DraftKings
If Amazon investors feel that they are the year-to-date losers in 2025 among the stocks on Wood's Monday shopping list, DraftKings is willing to take the other side of that bet. Shares of the online sportsbook operator are down 14% this year.
It was rolling in 2023 when the stock more than tripled, but investors have been folding since event-based prediction markets have blown up the barriers to entry for the online betting industry. For years, DraftKings has been a leader in online betting and iCasino operations by jumping through regulatory hoops on a state-by-state basis. Now platforms are emerging with contract-based workarounds to bet on specific sporting event outcomes.
If you can't beat them, join them. DraftKings is acquiring a smaller predictions market platform operator, unlike its rival that simply teamed up with the country's leading derivatives marketplace to shave the learning curve in this rapidly emerging niche.
3. Block
Finally we have Block on the block. It was Wood's largest purchase on Monday in three of Ark's ETFs. The company formerly known as Square is down 5% this year. The fintech pioneer has an impressive collection of properties including point-of-sale processor Square; consumer digital wallet CashApp; buy now, pay later platform Afterpay; and several crypto-based platforms.
It seems to be in the right place at the right time for the fintech revolution, but where's the growth? Revenue has declined in back-to-back quarters to kick off 2025. Analysts see a return to top-line growth for the third quarter that it will report next week, but that is expected to come with a sharp decline in profitability. With fears that consumer spending may wane in the fourth quarter compared to last year's robust holiday shopping, Block has a lot to prove. Next week's financial update -- and the guidance it provides -- will be the real test for Block.
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Rick Munarriz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Block. The Motley Fool has a disclosure policy.
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