While many investors flee at the sight of falling prices, Cathie Wood of Ark Invest does the opposite. The famed investor, known for backing disruptive technologies, recently doubled down on her “buy the dip” philosophy, targeting two notable names in the artificial intelligence space that have faced significant pullbacks.
Wood’s core strategy involves buying innovative companies with long-term growth potential during periods of market overreaction. The effectiveness of this approach is evidenced by her flagship Ark Innovation ETF, which has gained over 50% in the past three years. The recent broad decline in AI stocks presented what she likely saw as a timely window to build positions at reasonable valuations.
On February 4, shares of Advanced Micro Devices (AMD) plunged 17% in a single session following its earnings report. While the company beat expectations, the sell-off was driven by investor disappointment that its Q1 revenue forecast—though strong at $9.8 billion—did not exceed elevated hopes for AI chip demand. Seizing the moment amid the pessimism, Wood added AMD shares across five of her ETFs, including the Ark Innovation and Ark Autonomous Technology funds.
AMD now ranks as the sixth-largest holding in the Ark Innovation ETF, with a weight of nearly 3.9%. As a key rival to AI chip leader Nvidia, AMD’s graphics processing units are critical for both training and running AI models. Notably, the stock’s valuation has moderated considerably, now trading at around 29 times forward earnings estimates—down from over 60x just months ago. With the AI market projected to expand into the trillions, Wood’s purchase signals a focus on AMD’s long-term role in the compute race, rather than short-term quarterly fluctuations.
On the same day, Wood also bought shares of CoreWeave (CRWV), whose stock has fallen roughly 50% from its peak. The company was added to both the Ark Innovation and Ark Next Generation Internet ETFs.
CoreWeave provides cloud-based access to Nvidia GPUs, offering essential infrastructure for companies running demanding AI workloads. This business model has fueled remarkable growth, with revenue surging by triple digits year-over-year last quarter. Even after the recent drop, the stock remains up more than 80% since its IPO last March. The decline appears linked to market concerns over high capital expenditure and rich valuations across the AI sector. By stepping in now, Wood is betting that these short-term worries have overshadowed CoreWeave’s solid positioning to benefit from the accelerating enterprise adoption of AI.
These moves exemplify Wood’s signature investment style: identifying clear technological trends like AI, capitalizing on market sentiment swings to build positions counter-cyclically, and maintaining a long-term focus on a company’s fundamental competitive edge—especially when valuations become more attractive.
For investors, Wood’s latest “shopping list” offers more than just stock ideas; it demonstrates a disciplined approach to navigating market volatility. It underscores that when high-quality assets are sold off for non-core reasons, it can create a prime opportunity for long-term allocation. As AI technology shifts from proof-of-concept to widespread deployment, demand for computing power is expected to grow relentlessly.
By simultaneously investing in a leading chip designer and a key infrastructure enabler, Wood is positioning across two vital links in the AI value chain. Her actions suggest that the next phase of the AI revolution may well be building momentum during this period of market recalibration.
