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The stock market has been extremely volatile in recent months, owing to President Donald Trump’s tariffs-induced trade war and fears of a potential recession.
Savvy investors like Cathie Wood are treating this as an opportunity to scoop up growth stocks whose valuations have plunged, creating an appealing entry point. Wood is recognized for her emphasis on disruptive innovation and long-term growth stocks. Recently, she has made significant investments in Nvidia (NVDA) and Amazon (AMZN), capitalizing on market volatility while also demonstrating her belief in transformative technologies such as artificial intelligence (AI) and cloud computing. This accumulation came amid a broader tech selloff triggered by new U.S. tariffs on Chinese imports.
Should investors follow Wood’s lead and buy these two tech giants now? Let’s find out.
Why Is Cathie Wood Buying Nvidia Stock?
On April 7, Wood’s ARK Innovation ETF (ARKK) bought 151,979 shares of Nvidia, amounting to over $14.8 million in investment. The company again bought 188,980 shares totaling $18.2 million last week, bringing the total investment in Nvidia to $38.3 million. It is the ETF’s 31st-largest holding, accounting for 0.76% of the total portfolio.
Valued at $2.7 trillion, Nvidia’s stock is down 19% year-to-date.
Wood’s interest in Nvidia could have stemmed from a variety of factors. First and foremost, Nvidia continues to dominate the AI hardware space with cutting-edge chips and comprehensive AI systems that include networking and enterprise software. The company reported a strong end to fiscal 2025 due to extreme AI demand. Total revenue surged 114% to $130.5 billion, while adjusted earnings increased 130% to $2.99 per share. Nvidia GPUs are at the center of the AI revolution. It dominates the market for AI and data center accelerators, resulting in 142% growth in the Data Center segment to a record $115.2 billion. Analysts expect Nvidia’s revenue and earnings to increase by 56.4% and 51.4% in fiscal 2026. Revenue and earnings could further increase by 23% and 26.4% in fiscal 2027, respectively.
Furthermore, Nvidia’s CUDA platform has created an ecosystem that’s hard to replicate. Partnerships with Amazon’s AWS (Amazon Web Services), CoreWeave, Alphabet’s (GOOGL) Google Cloud, Microsoft’s (MSFT) Azure, and Oracle (ORCL) continue to deepen, particularly around generative AI infrastructure.
In addition, Nvidia is investing in quantum computing, establishing a research center in Boston to integrate quantum hardware with AI supercomputers, demonstrating its commitment to next-generation technologies. Wall Street analysts believe Nvidia's long-term opportunities in AI, data centers, cloud, quantum computing, self-driving cars, and other areas make it a compelling risk-reward opportunity.
Is NVDA Stock a Buy, Hold, or Sell on Wall Street?
Overall, Nvidia stock is a “Strong Buy” on Wall Street. Among the 43 analysts that cover the stock, 37 rate it a “Strong Buy,” two say it is a “Moderate Buy,” and four recommend a “Hold.” The average target price of $173.95 suggests upside potential of 55.1% from current levels. Additionally, the high price estimate of $220 implies the stock can rally as much as 96% over the next 12 months.
Nvidia stock is trading at 24 times forward 2026 earnings, lower than its five-year historical average of 71.7x. This represents an attractive entry point for a company with robust growth prospects.
Why Is Wood Buying Amazon Stock?
Last week, ARK Invest increased its position in Amazon stock. Starting with 54,120 shares on April 4, followed by 16,881 shares on April 7, and 33,746 shares on April 8, Wood’s total investment in Amazon is now $117.3 million. Amazon is already the 14th-largest holding in the ETF, accounting for 2.34% of the portfolio.
Amazon’s significant investments in AI, particularly through its AWS cloud services, are consistent with Wood’s focus on companies that use AI to drive innovation and efficiency. While Amazon’s retail operations generate the majority of its revenue, AWS is the crown jewel. It has a 30% share of the global cloud computing market and competes fiercely with Microsoft Azure and Google Cloud. AWS currently has an annual revenue run rate of $115 billion.
Amazon's top-line growth has moderated, but it remains impressive given its size. More importantly, profitability is increasing, owing in large part to AWS and advertising, which have high margins. In 2024, the company generated $638.0 billion in total sales, an 11% increase, while earnings rose 83.8% to $5.33 per share.
Aside from the cloud, Amazon is using generative AI to reinvent its retail business. The company plans to optimize inventory, pricing, and delivery using Rufus, the AI Shopping Assistant, Amazon Lens, and other AI tools. While the buzz isn’t loud, Amazon is quietly integrating AI into all aspects of its business. The monetization may take time, but the potential is enormous.
Analysts predict that Amazon’s revenue and earnings will increase by 9.3% and 14.3%, respectively, in fiscal 2025. Revenue and earnings could rise by 10.1% and 19.3% in fiscal 2026, respectively. Amazon stock is currently trading at 24 times forward 2026 earnings, making it a reasonable buy. The company is diversified, profitable, globally scalable, and constantly reinvesting in future technologies. While growth isn’t explosive, Amazon is a more balanced investment.
Is AMZN Stock a Buy, Hold, or Sell on Wall Street?
Valued at $1.96 trillion, Amazon’s stock is down 16.7% year-to-date, compared to the broader market loss. The recent dip in Amazon’s stock presents a buying opportunity for long-term investors seeking exposure to a company with solid fundamentals and growth potential.
Overall, Amazon stock is a “Strong Buy” on Wall Street. Among the 53 analysts that cover the stock, 48 rate it a “Strong Buy,” four say it is a “Moderate Buy,” and one recommends a “Hold.” The average target price of $260.87 suggests upside potential of 41.6% from current levels. Additionally, the high price estimate of $306 implies the stock can rally as much as 66% over the next 12 months.
The Key Takeaway
Cathie Wood’s goal in focusing on AI and cloud computing leaders is to position her portfolios to benefit from the rapid adoption of these technologies across various industries. Both these stocks are an attractive buy now on any dips for investors with longer investment horizons.
