Cathie Wood Goes Bargain Hunting: 3 Stocks She Just Bought

Cathie Wood tends to buy when some of her favorite stocks pull back. On Monday -- with the market having its strongest first day of the month since late 2022 -- she was particularly busy, too. The co-founder and CEO of Ark Invest didn't let upticks get in the way of adding to some of her existing positions.

She was a buyer of CoreWeave (NASDAQ: CRWV), Amazon (NASDAQ: AMZN), and Rocket Lab (NASDAQ: RKLB), even as the shares rose 19%, 5%, and 8%, respectively, on Monday. Amazon did hit a new high during the day, but the same can't be said about the bookends. CoreWeave and Rocket Lab are trading 44% and 53% below their 52-week highs, respectively. Let's take a closer look at the three potentially opportunistic purchases by Ark in August.

Ark Investment Management CEO Cathie Wood. Image source: Getty Images.

1. CoreWeave

CoreWeave stock rallied alongside other hyperscalers, but it would still have to more than double from here to revisit the all-time high it hit 14 months ago. The company, launched by a few hedge fund friends who initially bought a few GPUs to mine crypto -- before pivoting to the AI opportunity when the digital currency market sold off -- has been one of the market's more volatile investments since going public at $40 early last year.

Revenue rose 112% in its latest quarter, reported back in May. The top-line jump was better than expected, but the report wasn't well-received. A larger-than-projected loss disappointed investors, but it shouldn't have come as a surprise. CoreWeave had fallen short on the bottom line in two of the three previous reports. This is a top-line growth story, with revenue more than doubling in each quarter as a public company. It needs to invest in building out its empire at this stage, which introduces red ink on the other end of its red-hot revenue growth.

CoreWeave was making positive waves even after the market closed on Monday. Analyst James Fish at Piper Sandler initiated coverage of the stock with a bullish overweight rating, praising CoreWeave's engineering team for its ability to achieve cost reductions as it continues to grow to meet the booming demand for AI infrastructure. His $151 price target offers 76% near-term upside even after Monday's jump.

CoreWeave also announced on Tuesday morning that it was expanding into Indonesia, marking its first push to establish a data center presence in the Asia-Pacific region. It will build out three facilities offering a total of 360 megawatts of contracted IT power. The data centers won't be available until 2028, but it's another bet that CoreWeave is making today that should keep growth booming tomorrow.

Investors won't have to wait long for the next day when CoreWeave shares may be on the move. It reports its second-quarter results next week, after the market closes on Tuesday.

2. Amazon

I'll start by saying that buying Amazon on the day its shares hit a new all-time high isn't technically bargain hunting. However, it was Wood's largest purchase. I couldn't leave the country's fifth-most-valuable company by market cap out of the mix. Ark Invest was a buyer of Amazon for all five of Wood's aggressive growth ETFs on Monday, and was her biggest buy in four of them.

Unlike CoreWeave, investors already know how Amazon fared in the second quarter. It reported last week. Net sales rose 20% to $200.6 billion for the quarter, fueled largely by a 37% jump in its thriving and high-margin Amazon Web Services (AWS) cloud-hosting business. Its flagship e-commerce business still managed to grow in the mid-teens -- up 16% in North America and up 15% everywhere else -- but AWS is the reason Amazon just delivered its strongest top-line surge in five years.

3. Rocket Lab

Rockets go up. Rockets go down. In recent weeks, rocket stocks have largely gone down. This is often a dinner bell for Wood if she's a believer in the industry and certain players in that space. Speaking of space, Rocket Lab is no stranger to space. Unlike many upstarts, Rocket Lab has generated meaningful revenue for years as a leading provider of space systems and launch services.

It's not profitable yet, but analysts expect it to be on an adjusted basis next year and on a reported basis by 2028. Demand is booming, with an order backlog of $2.2 billion at the end of the first quarter. It reports second-quarter results next week. It was targeting $225 million to $240 million in revenue for the quarter in May, a 61% year-over-year increase at the midpoint. Investors may have turned their back on space stocks this summer, but reality offers a kinder level of stargazing.

Rick Munarriz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Rocket Lab. The Motley Fool has a disclosure policy.