This year, Cathie Wood, the CEO, co-founder, and primary investor at Ark Invest, is experiencing significant success. Instead of adopting a cautious approach to preserve her outstanding market gains in 2025, she’s taking an active stance and continues to push forward. The beginning of this week has been busy for her, as she has already increased her investments in some existing portfolios.
On Monday, Ark made purchases of additional shares in Advanced Micro Devices (AMD), Ibotta (IBTA), and Nu Holdings (NU). Let’s delve deeper into the details of these recent transactions by Wood.
1. Advanced Micro Devices
After some delay, the market has embraced AMD as a viable investment option for the rapidly expanding artificial intelligence (AI) sector. The company, known for producing microprocessors and graphics processing units (GPUs), experienced a 20% drop in share price in 2024. However, since hitting its lowest point three months ago, its stocks have more than doubled in value.
In spite of a recent spike, financial experts on Wall Street remain cautiously optimistic about Advanced Micro Devices’ (AMD) growth prospects. Stacy Rosgan from Bernstein Research increased his share price target from $95 to $140 on Monday, which is actually below the current stock value. He maintains his market perform rating, but he has raised his short-term projections for this rapidly growing company. The positive momentum and the anticipated resumption of AI chip sales to China in the second half of this year are providing a strong foundation for AMD’s growth.
1. Q1 – A substantial increase in revenue was reported.
2. Q2 – Revenue growth continued at an impressive pace.
3. Q3 – The company experienced another significant surge in revenue.
4. Q4 – Revenue gains were even more pronounced, marking a strong finish to the year.
5. Q1 (current quarter) – AMD is expected to maintain its momentum with further revenue growth.
- Q1 2024: 2%
- Q2 2024: 9%
- Q3 2024: 18%
- Q4 2024: 24%
- Q1 2025: 36%
In the first quarter of this year, the data center sector experienced a 57% rise in revenue compared to the same period last year, now making up half of AMD’s total business. A year ago, this sector represented only 42% of AMD’s revenue mix. Additionally, AMD’s gaming segment has recovered from its struggles in 2024. However, it’s important not to underestimate the growth potential in the data center market as it continues to demand more of AMD’s hardware. The larger the proportion of AMD’s income derived from this sector, the more robust its overall performance will be if it can maintain steady growth with its processors.
Despite analyst predictions for lower profit targets over the past three months, AMD’s stocks have been rising. The challenge is due to trade restrictions on exports to China, but optimism is growing as trade war negotiations progress. Although AMD appears affordable at 27 times its projected earnings for the next year, its profit outlook could improve significantly in the coming quarters, making its future just as promising as its recent performance on the stock market. AMD will release its second-quarter results in two weeks, and Wood’s purchase suggests that she anticipates the shares will increase after the report.
2. Ibotta
Let’s shift focus from increasing expansion to a company experiencing deceleration instead. Last year, Ibotta had a successful initial public offering (IPO). This company operates a digital marketing platform that offers cash-back rewards for in-store or online purchases made through sponsored deals. In 2023, their revenue skyrocketed by 52%. The springtime IPO of last year was priced at $88 and jumped to an opening price of $117 upon its market debut. However, the Ibotta stock closed at $38.75 on Monday, significantly lower than its IPO price and only a third of its April peak from last year.
The drop in stock price mirrors the expansion of Ibotta. Last year’s revenue surge slowed to a 15% increase, and subsequent outcomes have been disappointing. In the last quarter of the previous year, Ibotta’s total income dropped by 1%, and it barely rose more than 3% in the first quarter of this year. The projected figures for the second quarter, which will be announced next month, aren’t encouraging. In May, Ibotta forecasted a minimal 2% rise in revenue coupled with another significant decrease in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA).
Ibotta is experiencing some growing pains as it shifts from its direct-to-consumer model to expand its reach using a less profitable third-party approach. These growing pains may not persist forever. The past few quarters have been tough for Ibotta, falling short of market expectations, and the upcoming financial report might also be disappointing. However, analysts predict that Ibotta will see double-digit revenue and earnings growth by 2026, so it’s worth investing in the future now.
3. Nu Holdings
Growth for Nu Holdings, the fintech stock based in Latin America, is decelerating, with shares experiencing a minor decline over the past year. However, this doesn’t imply that the company behind Brazil’s digital bank Nubank isn’t expanding. In fact, revenue surged by 19% during its most recent quarter, driven by a parallel increase of 19% in accounts. As of March’s end, Nubank served approximately 118.6 million customers, representing 59% of Brazil’s adult population. This is an impressive feat for a platform that has only been active for 11 years and operates not just in Brazil but also Mexico.
The model operates effectively. On average, each active customer generates approximately $11.20 monthly revenue, while it only requires approximately Nu 0.70 per month to manage an account. Consequently, the business demonstrates inherent profitability, with profits growing at a faster pace than revenues. In its most recent quarter, adjusted net income increased by 27%. As of now, the company’s shares trade for less than 17 times the projected earnings for the next year. This price point represents a premium compared to traditional banking institutions with slower growth rates, but it also offers a reduction in value due to its rapid expansion rate.
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2025-07-22 18:22