Cathie Wood’s line of Ark funds may still be well off their heyday highs (back in 2021), but she’s been making some pretty good trades and dip buys of late. Of course, Wood is an investor in disruptive tech, and her style is not going to be for everyone, especially those who can’t handle large, double-digit percentage declines from time to time. In any case, I do think the year-to-date run in the ARK Innovation Fund (ARKK) and the rest of the Ark family is remarkable.
Indeed, tech, more specifically disruptive tech, seems to be back in the driver’s seat. And while it’s impossible to tell what the second half holds for the hyper-growth tech trade, Wood seems focused on the long-term horizon. And with that comes discipline to ride out those bumps in the road and the rather lengthy “winter” seasons that the entire tech sector tends to encounter every once in a while.
Cathie Wood has made some smart moves lately. Her latest bullish bet could pay off.
Given Wood’s braved the dip in many imploded tech stocks over the years while trimming overheated positions after marvelous runs (she recently sold some Coinbase (NASDAQ:COIN | COIN Price Prediction) shares as it flirted with a new all-time high), I’m inclined to view Cathie Wood as a value-conscious growth investor or a growth-focused value investor, whichever you’d prefer. In any case, I think it makes sense to pay attention to Wood’s big moves, especially if you’re a young growth investor in search of relative value.
In this piece, we’ll have a closer look at one of Wood’s recent bets that I think is a very smart value buy. While Cathie Wood is very much a growth-minded investor, she also seems to be a big fan of relative value where it can be had. Indeed, just because you’re a growth investor does not mean you cannot also be a value investor.
With Wood reportedly acquiring a significant number of shares of Advanced Micro Devices (NASDAQ:AMD) for several of her Ark funds back in June, investors may wonder if it’s time to follow her lead as the fallen AI chip firm looks to move out of the shadows of the great Nvidia (NASDAQ:NVDA) in an attempt to close the lead with the world’s largest company.
Indeed, it hasn’t been nearly as profitable to be in the number-two AI chip firm in recent years, with shares only recently bouncing back after suffering a painful 63% plunge from the March 2024 peak to the eventual March 2025 bottom. With shares now up close to 73% since April, AMD certainly seems like a catch-up trade for the many investors who missed the surge in Nvidia stock.
AMD earns a notable upgrade. Investors shouldn’t ignore it.
It’s not just Cathie Wood’s recent buying or the stock’s newfound momentum that make AMD a timely buy candidate for the second half. A big-name analyst on Wall Street updated the stock just over a week ago. CFRA analyst Angelo Zino, who has a buy rating alongside a $165 price target (22% upside from here), envisions AMD “closing the competitive gap to Nvidia” as soon as next year. The company’s new MI400x chip and upside from China are a huge reason behind the upgrade and price target hike.
Of course, it’s tough to tell how AMD’s next-gen offering will stack up to Nvidia’s in the new year. After all, Nvidia seems to always be a step or two ahead of the game. In any case, OpenAI’s top boss, Sam Altman, sounds like a believer after referring to the MI400x’s specs as “totally crazy.”
As to whether or not it’ll help AMD narrow the gap with Nvidia, though, remains another question entirely. Time will tell. For now, AMD stock looks way too cheap at 37.1 times forward price-to-earnings (P/E), with a robust rally that could sustain for quarters to come.
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