Famed innovation investor Cathie Wood is attempting to stage a comeback after a somewhat sluggish past few years. Though the Ark funds may be down and trailing the market, Wood isn’t letting volatility stop her from continuing to make bold and, in many cases, contrarian moves.
Even if you’re not an aggressive growth investor like Wood, her investment activities are still worth monitoring. Like it or not, she’s focused on playing the long game, seizing the best growth opportunities for the next five years.
In this piece, we’ll check into two AI stocks that Wood seems incredibly bullish of late. As we head into a new year that could see low interest rates and continued AI adoption collide, things may finally be looking up for Cathie Wood and her Ark exchange-traded funds (ETFs).
Key Points About This Article
- Cathie Wood has been aggressively buying AI innovators in recent months.
- AMD and Meta are relatively cheap large-cap AI plays worth owning for the next five years.
- If you’re looking for some stocks with huge potential, make sure to grab a free copy of our brand-new “The Next NVIDIA” report. It features a software stock we’re confident has 10X potential.
Advanced Micro Devices
Advanced Micro Devices (NASDAQ:AMD) is an AI chip maker that can and likely will give Nvidia (NASDAQ:NVDA) a good run for the AI race. Even if AMD remains the underdog, CEO Lisa Su and the company have what it takes to keep Jensen Huang and Nvidia on their toes.
Of course, many folks just don’t buy that AMD can keep up with Nvidia, a $3.3 trillion titan with a realistic chance of becoming the world’s largest company by the time the year’s over. Either way, AMD’s latest GPU reveal was intriguing, even if the market reaction was initially negative.
Does AMD face an uphill battle as it looks to beckon some customers away from Nvidia? Sure, but there’s a lot to look forward to over the next five years as AMD takes steps to make its own innovations competitive.
During the company’s “Advancing AI Event,” Lisa Su remarked that AI chips may be growing quicker than expected. Could it be that the tides in the AI scene are continuing to rise rapidly?
Only time will tell. Either way, AMD is putting its foot on the pedal as it seeks to do its part to meet AI data-center GPU demand that could experience north of 60% in annual growth over the next few years. AMD’s AI platform is encouraging, but it’s clear it needs to pick up the pace further to catch up with Nvidia.
The company’s MI350X chips are due for the second half of 2025. It will be interesting to see how the next-generation AMD offerings stack up with Nvidia’s Blackwell. Either way, AMD stock looks like a worthy underdog at a rather modest relative discount. Perhaps there’s a reason Wood has been piling into the name gradually through the year for her various Ark funds.
Meta Platforms
In a prior piece, I highlighted that Cathie Wood has been an active buyer of Meta Platforms (NASDAQ:META) for the Ark Next Generation Internet ETF (NYSEARCA:ARKW) in recent months.
Undoubtedly, it’s become tough, if not impossible, to beat the market without help from the Magnificent Seven companies. Cathie Wood may be famous for investing in less obvious, smaller tech firms. That said, Meta shows us that it’s worthy of any high-growth fund despite its size.
In recent years, Meta has shown us it’s more than just the best social media company in the world. Its most significant and best growth drivers lie in AI, wearables, and the metaverse.
Further, of all the Magnificent Seven companies, Meta may be the one that has the most to gain as the AI boom enters its third year. Arguably, Meta has the stage set to achieve industry-leading returns on investment from its AI-related R&D spending going into the new year.
Also, let’s not forget about the firm’s augmented reality (AR) efforts, which will eventually put the firm in a battleground with Apple (NASDAQ:AAPL) for the future of the metaverse. With new Ray-Ban smart glasses on the market, the ball is now in the iPhone maker’s court. Time will tell if Apple’s glasses, which may launch in 2027, stack up favorably.
For now, shares of Meta remain a relatively small (around 4%) part of the ARKW ETF. If Zuckerberg can continue delivering, one has to think Wood may be inclined to continue building an even larger position. Despite having one of the most exciting growth narratives, META stock isn’t all too expensive at around 24.5 times forward P/E.
It’s hard to believe that shares have shot up more than 540% since its 2022 lows. The heated rally may be far from over as Meta pivots into AI chips — an effort that could drastically reduce its dependence on GPU makers like Nvidia.
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