Cathie Wood buys $53 million of popular semiconductor stock

Cathie Wood, chief of Ark Investment Management, often uses post-earnings swings to add to her favorite tech stocks.

This week, she’s buying more Nvidia, adding $53 million to her stake as the stock pulled back a day after surging on better-than-expected earnings.

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Last year, the flagship Ark Innovation ETF gained 35.49%, far outpacing the S&P 500’s return of 17.88% in the same period. So far this year, Wood’s flagship Ark Innovation ETF (ARKK) is up 9.97% as of August 28, while the S&P 500 surged 12.65%, Yahoo Finance data shows.

Wood gained a reputation after the Ark Innovation ETF delivered a 153% return in 2020. But her style also brings painful losses in bearish markets, as seen in 2022, when the Ark Innovation ETF tumbled more than 60%.

Those swings have weighed on Wood’s long-term gains. As of August 28, her Ark Innovation ETF has delivered a five-year annualized return of -6.91%, while the S&P 500 has an annualized return of 11.33% over the same period, according to data from Morningstar.

Over the past 12 months through August 27, the Ark Innovation ETF saw roughly $2.09 billion in net outflows.

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Cathie Wood says AI could help support high corporate profits

Wood focuses on high-tech companies across artificial intelligence, blockchain, biomedical technology, and robotics. She believes these businesses have strong growth potential, but their volatility often causes fluctuations in the Ark’s funds.

Over the decade ended 2025, the Ark Innovation ETF wiped out nearly $5 billion in investor wealth, according to an report by Morningstar’s analyst Amy Arnott. That made it the fourth-biggest wealth destroyer among mutual funds and ETFs in the ranking.

Wood remains optimistic about AI, which she sees as a major driver of productivity, economic growth, and corporate profits in the years ahead.

In an Aug. 9 post on X, Wood said U.S. corporate profits remain unusually strong, with domestic profits before tax at 13.2% of GDP, a level she said is near multi-decade highs.

Related: Cathie Wood buys $28.1 million of popular tech stock

Some of that strength came from the massive monetary and fiscal stimulus during the pandemic, but Wood believes another factor is helping sustain margins today: companies are leaning into AI and productivity gains to protect them.

“I think we’re still early in seeing how far that can go,” she said, adding that companies that use AI effectively will “separate themselves from the ones that don’t.”

But not all investors agree with Wood’s optimism. Over the past 12 months through August 27, the Ark Innovation ETF saw roughly $2.09 billion in net outflows, according to data from ETF research firm VettaFi.

Cathie Wood buys $53 million of Nvidia stock

On Aug. 28, Wood’s Ark funds bought a total of 243,707 shares of Nvidia (NVDA), according to Ark’s daily trading information. Based on the latest closing price of $217.55, these stocks were worth about $53 million, making it one of the largest purchase recently.

Nvidia reported better-than-expected fiscal second-quarter results and issued revenue guidance above Wall Street estimates on Aug. 26. The stock jumped nearly 9% on Aug. 27 and then fell 4.5% on Aug. 28.

Adjusted earnings came in at $2.22 per share, topping the $2.10 estimate, while revenue reached $96.22 billion, above expectations of $92.17 billion, CNBC reported.

CFO Colette Kress said Nvidia expects fiscal 2028 revenue growth of 70%, well above analysts’ 44% estimate.

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“Customers’ forecasts point to our growth doubling next year. However, as I mentioned earlier, we expect to grow approximately 70% as we are supply-constrained,” she said during the earnings call.

Nvidia remains at the center of the AI boom, with its chips powering the most advanced AI models. The company is also providing financial support to help fund and build new AI data centers.

Investors have cooled a bit after Nvidia’s historic three-year rally. The stock is up about 16.6% year to date, outperforming the S&P 500 but trailing chipmaking peer AMD, which has surged 117.4%, and the Philadelphia Semiconductor Index, which has rallied 81.9% over the same period.

Still, many Wall Street analysts remain bullish on the stock after its earnings.

For example, JPMorgan raised its Nvidia price target to $320 from $280, maintaining an overweight rating, The Fly reported.

The firm cited accelerating data center growth, strong Blackwell Ultra demand, and Nvidia’s fiscal 2028 outlook, which it views as potentially conservative given strong AI demand.

Bank of America analyst Vivek Arya reiterated a buy rating and $350 price target on Nvidia, calling it a “top pick,” according to a research note sent to TheStreet.

Arya said Nvidia’s valuation “remains compelling.” He expects earnings to grow at roughly a 60% compound annual rate from 2026 through 2028, giving Nvidia a PEG ratio of about 0.3 times, versus roughly 1 times for the S&P 500.

Still, the analyst flagged lower gross margins, rising memory costs, custom-chip competition and Nvidia’s growing financial commitments as key risks.

Nvidia is not a top 10 holding in the Ark Innovation ETF.