Cathie Wood Targets Bargains Amid Market Turmoil

Renowned investor Cathie Wood sees opportunities despite the market crash. As companies' valuations drop, she emphasizes strategic long-term buying, particularly in AI sectors, including firms like Nvidia and Amazon, which may benefit from improved profitability in the near future.

Date: 10-04-2025

AI Rating: 7

The current stock market environment reflects significant volatility, prompting considerable downward pressure on stock prices, particularly in technology. Despite this, Cathie Wood's approach is to identify long-term opportunities in innovative sectors like artificial intelligence (AI). Her recent acquisitions of Nvidia and Amazon underscore this strategic focus.

Nvidia Analysis: Wood's purchase of 188,980 shares of Nvidia highlights an interest in a company that maintains a strong foothold in the AI chip market. Recent trading at about 21x forward earnings estimates (down from over 50x) signals a more attractive valuation. Nvidia's revenue reached $130 billion last year with impressive gross margins exceeding 70%. This strong financial performance indicates robust profit margins, giving potential investors confidence in its future growth, particularly as Nvidia diversifies into areas like quantum computing.

Amazon Analysis: Wood's acquisition of 7,520 shares of Amazon is strategically significant as the company’s AWS segment, which plays a crucial role in AI infrastructure, reflects diversified and increasing revenue streams. Trading at 26x forward earnings, also down from 38x, presents an opportunity for those looking to invest in established businesses capable of leveraging AI. Amazon's AWS has achieved a $115 billion revenue run rate, showcasing its dominance as a cloud service provider. This positions Amazon favorably for sustained profitability.

Market Considerations: Overall, while the sentiment around the stock market remains cautious due to tariffs and potential recession fears, Wood’s strategy suggests that investing in quality companies like Nvidia and Amazon may yield substantial long-term rewards. Her commitment to identifying undervalued assets during downturns may attract other investors seeking similar strategies.

Stocks: NVDA AMZN