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On Tuesday, Cathie Wood bought shares of AMD, BYD, and WeRide.
AMD was the only one of the three to move higher, but the stock has slipped 13% since peaking in October.
BYD and WeRide share a common interest in China and cars. Another common bond: They shed more than 3% of their value on Tuesday.
Cathie Wood like fast cars and faster AI chips. The co-founder, CEO, and ace stock picker of Ark Invest's growing family of exchange-traded funds (ETFs) kicked off the holiday-abridged trading week with a shopping list. With many growth stocks taking a step back on Tuesday, Wood was hungry for more.
She added to her funds' existing positions in Advanced Micro Devices (NASDAQ: AMD), BYD (OTC: BYDDY), and WeRide (NASDAQ: WRD) on Tuesday. Let's take a closer look at these three stocks.
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AMD stock was one of the few tech names moving higher on Tuesday, but the maker of central processing units, graphics processing units (GPUs), and other types of microprocessors has seen its shares fall 13% since peaking three months ago.
AMD was fashionably late as an artificial intelligence (AI) play. Its business serving data centers with AI chips started to pick up in the latter half of 2024, gaining momentum last year. Here's how AMD's year-over-year growth has clocked in over the past seven quarters.
Image source: Getty Images.
Did you spot the break in acceleration in the spring of last year? That's when tariff threats and eventually trade restrictions started to rattle the market for AMD into the world's second largest economy. The second quarter last year was when AMD took an $800 million hit, given its inability to move its Instinct MI308 data center GPU chips in China. And the war isn't over. Analysts see revenue decelerating again, rising just 26% for the fourth quarter that AMD will announce in two weeks.
The good news is that those same Wall Street pros see AMD's business improving 32% for all of 2026, on a 65% surge in earnings. This doesn't mean AMD is textbook cheap right now. It's trading at a forward P/E ratio of 35. This is a sharp contrast to AI leader Nvidia (NASDAQ: NVDA), fetching a forward multiple of 23. Nvidia has historically grown faster than AMD. There's still upside in this space, especially with booming demand that is surging even as the publicly traded champions of AI are holding back.
BYD did something last year that may be hard to fathom: It sold more electric vehicles (EVs) worldwide than Tesla (NASDAQ: TSLA). But that doesn't mean BYD is now a bigger EV stock than Tesla. BYD specializes in value-priced cars that it can produce in scale. BYD's $121 billion in trailing sales is well above the $96 billion Tesla has delivered across all of its businesses. Somehow, Tesla, with its market cap approaching $1.4 trillion, is worth almost a dozen BYDs.
Despite the growth advantage -- BYD's trailing revenue is up 23%, compared with Tesla's slightly negative showing -- the market is still not rallying behind the BYD story. The shares have risen 8% over the past year, but that's not beating the market.
Wood doesn't have to play favorites. Tesla remains her largest position across all of Ark's ETFs. However, she decided to increase her position in BYD and not Tesla on Tuesday.
Staying on the theme of Chinese cars, WeRide is a Chinese company racing for pole position in autonomous driving products and services. Growth is starting to step on the gas. It's a good time to be moving fast, with self-driving-car stocks shining lately.
WeRide now has licenses to operate autonomous vehicles in eight different countries. Revenue is starting to pick up, expected to more than double in each of the next three years. Profitability isn't likely to come sooner than 2028, but Wood is patient when she believes in a company or an industry. She happens to believe in both here.
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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, Nvidia, and Tesla. The Motley Fool recommends BYD Company. The Motley Fool has a disclosure policy.
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