Cathie Wood Goes Bargain Hunting: 3 Stocks She Just Bought
Key Points
Cathie Wood bought shares of AMD, Tesla, and Tempus AI on Wednesday.
AMD shares moved sharply lower after posting poorly received quarterly results. It wasn't that bad.
Tesla is shifting some of its production efforts to robotics after back-to-back years of flat revenue growth.
- 10 stocks we like better than Advanced Micro Devices ›
Cathie Wood has been getting busy on the trading floor. The recent market volatility means opportunity, and the co-founder, CEO and chief investment officer of Ark Invest doesn't shy away from buying some of her favorite stocks in a pullback for her Ark family of exchange-traded funds.
Fresh after the widely followed growth investor crushed the market in 2025, Wood added to her funds' existing stakes in Advanced Micro Devices (NASDAQ: AMD), Tesla (NASDAQ: TSLA), and Tempus AI (NASDAQ: TEM) on Wednesday. Let's take a closer look at these three stocks.
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1. Advanced Micro Devices
AMD stock delivered solid results on the surface. The maker of central processing units, graphics processing units (GPUs), and other microprocessors reported fourth-quarter revenue climbed 34% to reach $10.3 billion. It was a group effort, as a 37% increase for its client and gaming business was marginally outdone by a 39% surge for its data center revenue. This is a step back from the overall 36% year-over-year jump that AMD posted three months earlier in the third quarter, but it was still enough to land ahead of market expectations.
The news gets better as you go down the income statement. Operating margin widened to 17% from 11% a year earlier. Profitability more than tripled. AMD's adjusted earnings of $1.53 a share was 16% higher than Wall Street pros were expecting, the tech icon's strongest beat in more than a year. The market's response was to send the shares plunging 17% on Wednesday. Cathie Wood went bargain hunting.
It naturally wasn't as perfect a quarter as the headline numbers suggest. Guidance was disappointing. The $9.5 billion to $10.1 billion in revenue that AMD is targeting for the current quarter leaves the midpoint of that range just below where analysts were perched heading into this week's financial update. Tariffs and Chinese trade restrictions continue to weigh on AMD's growth potential outside of its home market. China's push to get its local tech leaders to champion their own artificial intelligence (AI) chip solutions could be problematic, especially if other countries souring on U.S. moves turn to the world's second largest economy for their needs.
In the meantime, AMD's slide is puzzling. It has now lost a quarter of its value since peaking three months ago. The AI revolution isn't going away. It was a late bloomer in this lucrative niche, but business has certainly picked up in just the last two years. Check out its top-line growth in that time.
- Q1 2024: 2%
- Q2 2024: 9%
- Q3 2024: 18%
- Q4 2024: 24%
- Q1 2025: 36%
- Q2 2025: 32%
- Q3 2025: 36%
- Q4 2025: 34%
The growth may seem to have stalled in the 30%+ range over the past year. Analysts see it staying here, eyeing 34% revenue growth this year, accelerating to a 37% push in 2027. This isn't a bad thing. Most cyclical tech businesses would love to deliver at least three years of better than 30% growth. In the meantime, AMD's explosive profitability is growing even faster. AMD is now trading for 30 times this new year's projected earnings, but just 19 times next year's forecast. It's not a surprise to see Wood buying more AMD this week.
2. Tesla
AMD has become one of Ark's largest holdings, but Tesla is the top dog across the combined ETF portfolios. Wood's Tesla position is roughly twice the size of any other position.
Tesla is transitioning. It's still the country's leader in electric vehicles, but the $7,500 tax credit for most domestic EV purchases ending in September has left a dent in its flagship business. It's not the only reason for the slowdown. Tesla has delivered back-to-back years of flattish revenue growth. Dramatic improvements to its autonomous-driving platform haven't been enough to jump-start auto sales. It needs something new.
Tesla is betting big on consumer robotics to be the next big thing. It's halting production of its Model S and Model X vehicles, at least temporarily, to use those production facilities to ramp up its autonomous humanoid Optimus robots. Mass adoption of the big-ticket household automatons is a big bet, but that wager worked out nicely in the automotive space for Tesla years ago.
Tesla stock has surrendered nearly 20% of its value since hitting an all-time high less than two months ago. Wood is buying more shares of her largest position.
3. Tempus AI
Was AI a theme for some of Wood's purchases on Wednesday? AMD is obviously a play on the expanding demand of generating AI results. Tesla's Elon Musk has a thriving AI business, which he may combine with one of his existing businesses. Tempus is the one with "AI" actually in its moniker.
Tempus is working on AI solutions to drive engagement for oncology and hereditary products. It's working. A hearty 65% of U.S. academic medical centers and 55% of the country's oncologists are connected to Tempus. The financial results -- at least on the top line -- have been explosive. Revenue has soared 84% through the first nine months of last year.
If you thought AMD and Tesla sliding 25% and 19% from recent highs is a lot, Tempus shares have been cut in half since their October highs. It's a good time to shop given the market's marked-down pricing, but, naturally, the risks remain in these volatile times.
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Rick Munarriz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices and Tesla. The Motley Fool has a disclosure policy.
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