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On Tuesday, Cathie Wood bought shares of AMD, Airbnb, and Figma.
AMD and Airbnb are experiencing some near-term headwinds, but they both have strong long-term potential.
Figma has plummeted by 62% from the post-IPO peak it hit this summer -- but it's still not textbook cheap.
Cathie Wood is in a good groove again. The largest of the exchange-traded funds (ETFs) she manages as CEO of Ark Invest is up by 77% over the past year, crushing the market. The aggressive growth stocks she favors are in style on Wall Street, and investors are paying attention to her moves.
She did a little more buying than usual on Tuesday, adding to her funds' existing positions in Advanced Micro Devices (NASDAQ: AMD), Airbnb (NASDAQ: ABNB), and Figma (NYSE: FIG). Let's take a closer look at these three dynamic stocks.
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It has been a wild ride lately for AMD investors. The maker of central processing units (CPUs), graphics processing units (GPUs), and other types of microprocessors has seen its shares more than double since bottoming out in early April after the first wave of concerns about President Donald Trump's tariffs rattled the market. However, despite that surge, the stock is barely trading 5% higher over the past year. Yes, this chipmaker has underperformed the market over the past year. No one said that investing in AMD was going to be boring.
The case for buying AMD stock these days is clear. Booming demand for generative artificial intelligence (AI) means that tech players will keep building out massive new data centers to crank out resource-intensive results. AMD makes chips that propel data centers onto their AI-rendering journeys. It's not the top dog in this niche, but there is clearly room for more than one canine here.
Image source: Getty Images.
There are some signs that AMD stock might be taking a breather -- the shares have slipped by 15% from the 52-week high they touched last month. After a year of accelerating revenue growth, AMD's top-line increase slowed to 32% in the second quarter. Management is forecasting revenue growth of just 28% year over year in the current quarter.
One analyst did downgrade the stock late last week. Erste Group's Hans Engel feels that its valuation is elevated given the lack of improvement in its operating margins and its unimpressive returns on equity. AMD also trades now for about 27 times next year's expected earnings, which Engel believes is a bit too high. So he replaced his earlier buy rating on the stock with a hold rating.
That valuation may seem high for a company experiencing decelerating growth, but there are external issues contributing to the drag. AMD, like others in this space, has been caught in the crossfire of the trade war, which is restricting sales of its potent Instinct MI308 GPUs into China. It's still selling plenty of chips elsewhere, though, and its client and gaming segment is in the midst of a resurgence, with sales up 69% in the second quarter.
Airbnb shareholders could probably use a vacation. The stock is up just 4% over the past year -- and trading 7% lower year to date despite 2025's generally buoyant market environment. The top app for booking vacation properties has found revenue growth for the fourth consecutive year. However, the 13% year-over-year increase it booked in its latest quarter was its healthiest result in more than a year.
There are certainly plenty of reasons to be concerned about investing in Airbnb. Trade war rhetoric is making international travel less savory. Closer to home, more companies are requiring employees to return to working in offices, which means fewer will be able to travel -- often using an Airbnb -- while still getting work done remotely. The biggest area of looming concern for the company's outlook, though, is that the U.S. economy may be softening. Consumer confidence has been dropping for the past year, and when people are worried about their finances, they may not see springing for a getaway as prudent. Meanwhile, hotel chains are hopping into Airbnb's niche, offering standalone property rentals to loyalty club members who are pining for something different.
The good news is that Airbnb is still a moneymaker. It has generated $4.3 billion in free cash flow over the past year. Management appears to see the stock as a good deal at current prices, given that it announced a $6 billion share buyback authorization this summer. It's trading at just 25 times forward earnings, a historical low for the travel platform operator.
It's hard to consider Figma a market laggard. It priced its initial public offering (IPO) at $33 per share just two months ago. The provider of cloud-based design tools for websites, apps, and other digital platforms was 64% higher than that as of Tuesday's close. However, because of the initial feeding frenzy around the offering -- which was 40 times oversubscribed -- the stock had jumped as high as $143 on its second day of trading.
Figma is not textbook cheap, but it is down more than 60% from its late July peak. Ark Invest got in on the IPO, and Wood has been adding to that position in recent weeks as the shares have moved lower.
Figma checks off a lot of boxes for growth investors. Revenue rose by 48% last year. It is decelerating this year -- with year-over-year growth of 46% and 41% through the first two quarters of this year, respectively -- but that's still a healthy clip. It is in a competitive space, but it's clearly broadening its appeal to a growing audience. It trades at a much higher earnings multiple than AMD or Airbnb, but its sharp pullback after the initial IPO pop does provide a potential entry point for investors. Wood seems to think so, at least.
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Rick Munarriz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices and Airbnb. The Motley Fool has a disclosure policy.
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