Legendary investor returns to Nvidia: and this is the stock she sold
The well-known investment manager, who built her name on bets on Tesla and futuristic technologies, is increasing her holdings in Nvidia at the expense of its major competitor. The purchase came immediately after impressive reports and a 70% growth forecast — and at a surprising price.
Cathie Wood, founder and CEO of the investment firm ARK Invest, has returned to betting big on Nvidia. ARK purchased 243,707 shares of Nvidia at a total cost of approximately 53 million dollars. The purchase was made immediately after the stock fell 4.6% to 217.55 dollars last Friday, a retreat from the surge generated by the company's strong second-quarter report.
At the same time, ARK sold 156,286 shares of competitor AMD, a move that continues a clear trend of rotation between the two chipmakers.
Wood is one of the most well-known investment managers in the world, whose name was built on aggressive bets on "futuristic" sectors like genetics, robotics, and electric vehicles — led by her famous bet on Elon Musk's Tesla. However, her performance is mixed, to say the least.
Her largest fund, ARKK, has lost value at an annual rate of about 9% over the last five years. In other words, the mere fact that Wood is buying a stock is not a "seal of approval" — it is an interesting signal, but not a substitute for independent due diligence. The value of her moves lies primarily in the signal it sends: growth investors, who abandoned Nvidia in favor of other areas of the AI trend, are returning to it.
Nvidia published reports in which revenues more than doubled for the quarter, the largest gap from expectations in two years, and added a forecast for growth of about 70% in fiscal year 2028. But what really excited investors were not the numbers, but CEO Jensen Huang's statement that actual demand is even higher, and supply is the limiting factor. For a growth investor like Wood, this is exactly the justification needed: a 5 trillion dollar company that simply sold out all its inventory.
The figure that is perhaps most surprising in the whole story concerns valuation. Based on expected earnings for 2028, Nvidia trades at a price-to-earnings ratio of about 17 — lower than the average ratio of the entire S&P 500 index, which stands at about 20.
The 70% profit growth forecast "shrinks" the future ratio: the higher the expected profit, the cheaper the current price looks in relation to it.
Alongside this, the company announced an investment of 3.5 billion dollars in convertible bonds of Taiwanese chipmaker MediaTek. The investment is part of an expanded collaboration in which MediaTek will adopt Nvidia's NVLink Fusion platform, which allows for the integration of custom-designed chips with Nvidia hardware.
Wood's purchase illustrates an important point: even after a rise of hundreds of percent, there are those who see an opportunity in Nvidia — not because of a "dream," but because of a valuation that looks reasonable relative to growth.
For those who hold exposure to Nvidia through index-tracking funds, this is a reassuring angle. Nevertheless, it is worth remembering two caveats: first, the entire valuation argument depends on the forecast actually coming true. Second, even the bets of a famous investment manager are not a guarantee — the historical performance of Wood's main fund reminds us that even experts make mistakes. The decision, as always, should rely on your own judgment and not on who is on the other side of the trade.
