Cathie Wood Bets Big on AMD: Could This Chip Stock Be the Next Nvidia?

Cathie Wood, the renowned CEO of ARK Invest and one of Wall Street’s most influential investors, is well-known for her bold, high-conviction bets on disruptive companies poised to reshape industries. While Nvidia has dominated headlines as the leader in artificial intelligence (AI) hardware, Wood has recently shifted her focus to a rival chipmaker that could emerge as a significant challenger: Advanced Micro Devices (AMD).
AMD: Cathie Wood’s Latest Favorite
Over the past three months, ARK Invest has significantly increased its position in AMD, purchasing 435,477 shares across October, November, and December. These shares have been distributed across four of ARK’s flagship ETFs:
- ARK Space Exploration & Innovation ETF
- ARK Autonomous Technology & Robotics ETF
- ARK Next Generation Internet ETF
- ARK Innovation ETF
Since Wood began buying AMD on October 24, the stock has dropped approximately 21% (as of January 9). However, this decline seems to have strengthened her resolve to invest more heavily, betting on AMD’s long-term growth potential.
AMD vs. Nvidia: A Growing Rivalry
Nvidia has long held a dominant 90% market share in the data center GPU market, thanks to its cutting-edge chips that power the AI revolution. Yet AMD is beginning to challenge this dominance. Over the past year, AMD has captured an estimated 10% market share in data center GPUs, driven by its MI300 accelerator chip.
Major tech giants such as Microsoft, Oracle, and Meta Platforms have adopted AMD’s GPUs, complementing their existing Nvidia setups. This diversification signals growing trust in AMD’s technology and has allowed AMD’s data center GPU business to grow at a rate comparable to Nvidia’s.
The Path Ahead for AMD
AMD’s journey is just beginning. The company has plans to release new GPUs in 2025 and 2026 to compete with Nvidia’s upcoming Blackwell and Rubin chipsets. As AI infrastructure investment accelerates, AMD could carve out a larger slice of the market, particularly by offering cost-competitive alternatives to Nvidia’s premium-priced products.
Valuation: A Bargain in the AI Space
At its current price, AMD is trading near 52-week lows, with a forward price-to-earnings (P/E) ratio of 24—on par with the broader S&P 500. This valuation suggests that AMD’s growth potential may be underappreciated by the market, despite its position as the second-largest player in the AI chip sector.
Cathie Wood’s bullish stance on AMD highlights her belief in the company’s ability to capitalize on the growing demand for AI and data center hardware. For long-term investors, AMD presents an intriguing opportunity to invest in a high-growth sector at a compelling price.