Cathie Wood Invests $22 Million in AMD, Eyes AI Growth Potential

Recently, Another investment Cathie Woods’ ARK (ARKK, Financial) fund made included the advanced producer of microprocessors Advanced Micro Devices (AMD, Financial), where ARK bought 155,637 shares worth $22.11 million on the 2nd of December next year. This comes after ARK bought 111,080 AMD shares in October when the stock dropped, triggered by the company’s conservative outlook for the fourth quarter. While AMD delivered third-quarter earnings per share in line with market expectations, the company’s revenue outlook for the next quarter was below market expectations, which made investors worried. Nevertheless, CFO Lisa Su still has a positive outlook on high-potential markets, such as data centers, client solutions, and artificial intelligence, as there is a higher need for computing capability.

The investment boosted ARK’s belief in AMD’s potential to capture the increasing AI market, where it plans to compete with Nvidia for chip market share. Although market performance is less spectacular than Nvidia’s, Wood’s decision shows confidence in AMD’s future, especially in using artificial intelligence to advance cloud computing and data center markets. A considerable increase has also been observed in the AI spending by major cloud providers, including AWS, Microsoft, Google, etc., based on which AMD has chosen strategic sectors for its production. Wood’s investment supports her agenda of funding technological innovators with significant opportunities in the developing technology sector.

This article first appeared on GuruFocus.