Cathie Wood Increases Stakes in Growth Stocks Amid Mixed Earnings

Cathie Wood's aggressive buying of growth stocks, including AMD, Toast, and Shopify, may spark investor interest. However, mixed earnings reports and analysts' reactions could heavily influence stock performance.

Date: 12-02-2025

AI Rating: 6

Investors Keeping an Eye on Key Stocks

Cathie Wood's recent buying spree across multiple growth stocks showcases her belief in the sector's potential. Notably, three stocks were highlighted: Advanced Micro Devices (AMD), Toast, and Shopify, all of which have recently released earnings results that may significantly affect their stock valuations.

Advanced Micro Devices (AMD): AMD's revenue grew by 24%, marking its most substantial year-over-year increase in two years. The data centers segment, which now comprises over 50% of its business, experienced a remarkable 69% increase in revenue. However, the company also faced challenges, as its gaming and embedded segments saw declines of 59% and 13%, respectively. While overall revenue met expectations, net income landed as projected, failing to impress investors. Moreover, the guidance suggests a sequential dip in sales, which has prompted multiple analysts to lower their price targets on AMD, suggesting a mixed outlook for the stock.

Toast: Contrastingly, Toast has shown a brighter performance, doubling its stock price over the past year. The company has reported significant growth, with a 28% increase in restaurant locations using its services. After years of losses, Toast has recently turned profitable, reporting positive results in consecutive quarters. While the stock appears to be trading at a premium with a forward earnings ratio of 45, its scalability places it in a favorable light.

Shopify: Shopify experienced a revenue surge of 31% in its fiscal fourth quarter, marking its strongest growth in three years. The company’s expanding presence in North America, combined with its growth in international and offline revenue, highlights a positive trend. Additionally, Shopify's free cash flow margin widened to 22%, indicating an improved financial position. Following its earnings announcement, multiple analysts raised their price targets, resulting in a notable spike in stock price.

In conclusion, while AMD faces uncertain prospects amidst analyst downgrades, both Toast and Shopify project a more favorable outlook thanks to their robust growth metrics and improving financial results.

Stocks: NASDAQ: AMD NYSE: TOST NYSE: SHOP