Cathie Wood is renowned for two key traits: making bold investment decisions that often go against popular opinion and maintaining a steadfast long-term focus. This approach means Wood might sell a highly popular, soaring stock and instead purchase shares of a stock that has recently declined. As the CEO of ARK Invest, she targets innovators—her preferred type of company—at reasonable prices. She’s not concerned if a stock struggles in the short term, as her strategy involves holding onto companies throughout their growth trajectories. Just this week, Wood demonstrated this strategy by making moves involving three artificial intelligence (AI) stocks. AI aligns perfectly with Wood’s interests due to its potential to revolutionize global industries, potentially generating billions of dollars in revenue for leading companies. Recently, Wood reduced her stake in one of her favorite stocks—one that has surged 1, 000% over the past three years—and increased her positions in two other major AI players. Let’s examine her activity in detail. Selling a favored stock Starting with the stock she sold, Wood offloaded shares of Palantir Technologies (PLTR -1. 49%) during several trading sessions this week.

Palantir, a developer of AI-driven software solutions, ranked as her sixth-largest holding as of May 9, representing 6% of her flagship Ark Innovation exchange-traded fund (ETF). Although Palantir’s recent report showcased strong revenue growth coupled with balanced profitability and highlighted robust future demand, Wood may have decided to secure some gains and redeploy capital elsewhere. Additionally, Palantir shares trade at roughly 200 times forward earnings, a steep valuation that could pressure near-term returns. Nonetheless, Palantir’s sizable presence in Ark Innovation signals that Wood remains confident in the company’s long-term earnings potential and stock performance, despite its remarkable quadruple-digit price increase over the past three years. Buying into two AI chip leaders Turning to Wood’s purchases, she increased her holdings of AI chip manufacturers Nvidia (NVDA -0. 62%) and Advanced Micro Devices (AMD 1. 14%) within Ark Innovation in the past week. This move aligns with Wood’s value-driven approach considering their current valuations. Nvidia’s stock now trades at about 26 times forward earnings, down from 50 times earlier this year, while AMD’s valuation also declined, currently at 25 times forward earnings compared to over 30 times a few months ago. Nvidia leads the AI chip market and its rapid innovation pace is expected to maintain this dominant position. Investors like Wood who believe in AI’s growth potential likely see Nvidia as an attractive buy, supported by the company’s record revenue, high sales profitability, and ambitious product development pipeline. Similarly, AMD is making significant strides in the AI chip sector, and there is ample market space for AMD to thrive without dethroning Nvidia. AMD CEO Lisa Su reported an “outstanding start to 2025” in the recent earnings release, with revenue and gross profit growing in double digits and a gross margin of 50%, reflecting strong sales profitability. AMD’s leadership in central processing units (CPUs), fundamental to standard computers, along with its AI capabilities for data center clients, has driven this robust growth.