Cathie Wood Goes On a Selling Spree: 3 Stocks She Just Sold
Key Points
Cathie Wood sold some of her shares in AMD, Robinhood, and Roku on Thursday.
AMD, Robinhood, and Roku are up 295%, 22%, and 58% over the past year. Ark is doing some profit-taking.
Robinhood is trading higher despite posting its weakest revenue growth in more than three years.
- 10 stocks we like better than Advanced Micro Devices ›
I've spent years covering what Cathie Wood is buying. The widely followed aggressive growth investor makes it easy. As the co-founder, CEO, and chief investment officer at Ark Invest she routinely publishes her firm's daily trades across all of its ETFs. Today I want to talk about some of her recent sell decisions.
Ark lightened its positions in Advanced Micro Devices (NASDAQ: AMD), Robinhood Markets (NASDAQ: HOOD), and Roku (NASDAQ: ROKU) on Thursday. The three stocks have entirely different stories. One is experiencing sharply accelerating growth, but another is going in the different direction. The third recently announced that it was being acquired. Let's take a closer look at what could be driving Wood to reduce the weight of these three stocks in her ETF portfolios.
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1. Advanced Micro Devices
AMD stock has almost quadrupled in value over the past year. The artificial intelligence (AI) boom is fueling a surge in demand for its central processing units (CPUs) and graphics processing units (GPUs). Revenue growth has accelerated for three consecutive quarters.
Revenue rose 38% in AMD's latest quarter to $10.3 billion, but was essentially flat on a sequential basis. Reported earnings nearly doubled, rising a still better-than-expected 45% on an adjusted basis. The story has certainly gotten better for AMD over the past year, but have the skyrocketing shares outpaced the improving fundamentals?
AMD's valuation has become challenging. The stock is now trading at 74 times this year's earnings and a still lofty 41 times next year's analyst profit target. Growth investors can justify paying higher multiples for ascending businesses in the AI boom, but there are limits.
Consider Nvidia (NASDAQ: NVDA), for example. The country's most valuable company by market cap is the one that started the movement. It's still growing considerably faster than AMD. Revenue rose 85% for its latest quarter, more than double AMD's growth. Reported net income more than tripled. Adjusted earnings more than doubled. Nvidia stock is trading at just 16 times next year's projected earnings. AMD might still be appealing, given its longer runway, but it's not shocking to see Wood lighten this winning position to deploy elsewhere.
2. Robinhood Markets
Growth has decelerated sharply at Robinhood lately. Revenue rose 15% in its latest quarter, the next-gen trading platform's weakest report since late 2022. As a painful reminder, that was the year that all of the major stock market indexes posted double-digit declines and the crypto market shed almost two-thirds of its value.
The climate is different this year, at least on the equities side. Stocks have been moving higher, but Robinhood's transaction-based revenue relies more on options and crypto than it does on stock trades. The platform has expanded into futures and predictive markets for growth, to keep its young trader base close and diversify its revenue streams.
In the meantime, investors have to be somewhat relieved to find the shares trading marginally higher in 2026 and up a respectable 22% over the past year. After back-to-back quarters of slowing top-line growth, a positive return is refreshing. It might also be why Wood is taking advantage of the disparity to reallocate her position in Robinhood.
3. Roku
You don't need a decoder ring to figure out this last sell decision. Roku agreed last month to a cash-and-stock deal -- initially valued at $160 per share -- to be acquired by Fox (NASDAQ: FOXA). I have been vocal about my displeasure with the arrangement, but a deal is a deal.
Roku CEO Anthony Wood has a majority of the voting shares and is backing the transaction. He also has a role waiting for him at Fox once the deal closes in the first half of next year. It's pretty much a done deal, with little chance of antitrust regulators nixing the pairing or a rival bidder stepping up with a substantially higher offer at this stage.
Investors can stick around until the deal closes in the first half of next year, but is the premium worth it? The deal calls for Fox to pay $96 in cash and 0.9693 shares of Fox Class A common stock. Fox shares have started to inch higher after initially plunging following the deal's announcement, but it's still well below the original $160 price tag. Investors are looking at $148.09 in value as of Thursday's close, largely anchored to the cash component. That's a 5.6% return over the next 6 to 12 months unless Fox shares move higher. As a growth investor, I can see why Wood would prefer to put that money to work elsewhere.
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Rick Munarriz has positions in Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Nvidia, and Roku. The Motley Fool has a disclosure policy.
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