Cathie Wood Goes Bargain Hunting: 3 Stocks She Just Bought
Key Points
Cathie Wood added to her positions in Nvidia, SpaceX, and Airbnb on Tuesday.
Nvidia just authorized a record share buyback, but it hasn't even completed the last one it announced four months ago.
SpaceX and Airbnb are trading well below their recent highs, but they each have strong growth momentum.
Cathie Wood has been quiet on the trading front in recent trading days, but she was busier than usual on Tuesday. The founder-CEO and chief investment officer of Ark Invest was busy adding to existing growth-stock positions in her exchange-traded funds. What was on Wood's shopping radar on a largely sour day for the market?
Ark bought shares in Nvidia (NASDAQ: NVDA), Space Exploration Technologies (NASDAQ: SPCX), and Airbnb (NASDAQ: ABNB) on Tuesday. Nvidia moved lower on Tuesday, but it's closed just 3% away from its all-time high. SpaceX and Airbnb moved higher, but they are trading 19% and 34% below their previous highs, respectively. Why is Ark Invest adding to these three stocks, and should you follow suit? Let's take a closer look.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
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1. Nvidia
It was the share buyback authorization heard around the world. Nvidia kicked off this week by announcing board authorizations for a record $150 billion in stock repurchases. It would be a lot, but given Nvidia's market-leading $5.5 trillion market cap, this would translate into reducing its share count by less than 3%.
There is also no obligation or timeline to carry out these purchases. Nvidia's press release indicates that it now has $235 billion in share repurchase authorizations, but that only means that it hasn't even started to eat into the $80 billion in additional buybacks it authorized in May of this year. Nvidia is still working on wolfing down shares from last summer's repurchasing announcement.
Stock buybacks are common when a cash-rich company has depressed shares, but that's not the case here. Nvidia stock is a good trading day or two away from taking out its previous all-time high. CEO Jensen Huang argues that the stock is cheap, and he does have a point.
Growth has been spectacular given the AI boom. Nvidia's top-line growth has been accelerating dramatically over the last few quarters.
- Q2 FY 2026: 56%
- Q3 FY 2026: 63%
- Q4 FY 2026: 73%
- Q1 FY 2027: 85%
- Q2 FY 2027: 106%
Guidance calls for revenue growth to slow to 89% for the current quarter, but Nvidia has a history of conservative outlooks. In the meantime, you can buy Nvidia today for just 14.5 times what analysts see it earning next year. Even if growth starts to slow from here, the deceleration process has a long way to go before you arrive at a point where a forward earnings multiple in the low teens isn't considered cheap for this high-margin market leader.
2. SpaceX
It's now been more than three months since SpaceX stock went public. Just like its rockets, the IPO has had its ups and downs. The bad news is that the company behind the Starlink satellite-based connectivity service and a penchant for reusable rockets has seen its shares fall by more than a third since its initial market debut pop. The good news is that SpaceX's stock is already 42% higher than it was when it bottomed early last month.
The ceiling remains high. The floor remains low. SpaceX is currently losing money, but it's expected to orbit that corner next year. In the meantime, revenue should more than double in 2027 and continue to grow at a healthy clip for several more years.
3. Airbnb
AI? Check. Space exploration? Check. A cozy beach house to entertain your extended family? Airbnb may seem like an odd business for an aggressive growth investor to be loading up on here, but Airbnb is really just a tech company that has excelled at mastering the scalability of short-term rentals for rooms and residences.
Airbnb stock has been a consistent grower coming out of the pandemic, something that you can't say when it comes to most consumer-facing hospitality and lodging platforms. Revenue is growing at a double-digit percentage pace for the sixth consecutive year. The 16% top-line growth analysts see happening this year would be its strongest in crease in three years. There may be a groundswell in some communities against the short-term rentals that Airbnb injects into neighborhoods, but that's not as loud as the cry against data centers -- and Nvidia is doing just fine as the world's most valuable company in that regard. Airbnb checks out, in more ways than one.
Rick Munarriz has positions in Nvidia. The Motley Fool has positions in and recommends Airbnb and Nvidia. The Motley Fool has a disclosure policy.