A lot of money managers may have taken Wednesday off ahead of the Thanksgiving holiday, but Cathie Wood doesn’t squander a single trading day. The co-founder, CEO, and stock picker for Ark Invest was busy making portfolio moves across her firm’s family of aggressive growth exchange-traded funds.
What was Wood buying on Wednesday? She added to existing positions in Advanced Micro Devices (NASDAQ: AMD), Amazon (NASDAQ: AMZN), and Pinterest (NYSE: PINS). Let’s take a closer look at some of the purchases that Wood is hoping will pay off on Thanksgiving Eve.
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The country’s most valuable company by market cap is a chip stock that everyone loves as a leading artificial intelligence (AI) play, but unfortunately that isn’t Advanced Micro Devices. In a strong year for most tech stocks, AMD stock is trading 8% lower in 2024.
AMD is a chip company that’s trying to make its mark in a market hungry for AI processors. Its data center business is booming, but the rest of its operations are stuck in reverse. Despite its sluggish stock, it’s not exactly cheap. It trades for 27 times forward earnings. However, it just posted its strongest revenue growth in two years. Is this market laggard about to become a leader?
Image source: Getty Images.
After four quarters of failing to top 10% year-over-year top-line growth, AMD saw its revenue climb 18% to $6.8 billion in the third quarter. Its data center segment saw its revenue surge 122%, and at $3.5 billion for the quarter, it now accounts for more than half of its business. The AI revolution is cooking for AMD right there. Unfortunately, this naturally means that the balance of its business is struggling. Its gaming and embedded segments saw its revenue plunge 69% and 25%, respectively. Its client segment did manage to grow at a 29% clip, but the bullish argument for AMD rests on its fast-growing data center business. Profitability more than doubled. It’s the third quarter in a row that…
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