Cathie Wood Buys AMD & TSMC: AI Chip Stock Analysis, Nvidia Alternatives

 

Key Takeaways

• Cathie Wood's Ark Invest has been accumulating shares in Advanced Micro Devices (AMD) and Taiwan Semiconductor Manufacturing (TSMC) since April 2025 .
• AMD now ranks as Ark’s 11th-largest holding after buying ~800,000 shares in late June alone . TSMC saw 190,000+ shares added in June .
• TSMC is positioned as a "pick-and-shovel" AI play—it manufactures chips for Nvidia, AMD, and others, insulating it from design competition .
• AMD’s valuation (36x forward P/E) reflects optimism about its MI300X/MI325X AI accelerators, though Nvidia’s dominance remains a concern .
• Geopolitical risks (China-Taiwan tensions) impact TSMC, but its global expansion (U.S., Japan fabs) mitigates this .

Cathie Wood’s Strategic Pivot: Why Semiconductors, Why Now?

Cathie Wood’s Ark Invest made headlines again this past quarter, not for doubling down on Tesla or crypto, but for shifting big into semiconductor stocks. Historically, Ark focused on disruptive tech like genomics, fintech, or EVs—think Tesla, Coinbase, or Roku . But since April 2025, Wood started quietly reallocating capital toward AI-enabling chipmakers, specifically AMD and TSMC .

This ain’t random. Wood’s team believes AI’s infrastructure buildout is still in its early innings. In their Big Ideas 2025 report, they argued AI could add $12 trillion to global GDP by 2030, with semiconductors as the backbone . And while Nvidia’s been hogging the spotlight, Wood targeted undervalued players with clearer runways. Like, she sold Tesla shares (too "overhyped") and dumped specialty foundries like Tower Semiconductor . Instead, she’s betting that AMD’s data center surge and TSMC’s manufacturing moat offer better risk-reward.

Advanced Micro Devices (AMD): Betting on an AI Underdog

Ark’s been holding AMD for a while, but things got serious in late April. They snapped up 800,000 shares between June 17–30 alone, spreading ’em across four ETFs: ARK Innovation (ARKK), Autonomous Tech (ARKQ), Next-Gen Internet (ARKW), and Fintech (ARKF) . AMD’s now Ark’s 11th-largest position—jumping up thanks to a 61% stock surge since April .

So why the rush? Two catalysts:

1. Data center revenue popped 69% YoY in Q1 2025, hitting a record $3.9 billion .
2. Its MI300X GPU (a direct Nvidia H100 rival) landed deals with Microsoft and xAI—with the next-gen MI325X due late 2025 .

But AMD’s not cheap. At 36x forward earnings, some worry it’s pricing in perfection . And let’s be real—Nvidia’s ~90% market share in AI chips ain’t evaporating overnight . Wood’s likely banking on AMD carving a solid #2 niche, especially as clients like Microsoft seek alternatives to avoid Nvidia lock-in.

Taiwan Semiconductor (TSMC): The Unsung Hero of the AI Boom

While AMD designs chips, TSMC builds ’em. As the world’s largest contract chipmaker, it cranks out silicon for Nvidia, AMD, Apple, and others. Ark bought 190,000+ shares in June after initiating a position in May . Unlike AMD, TSMC’s appeal isn’t tied to winning design wars—it profits if any AI chip demand rises.

Think of TSMC as toll-road operator in the AI gold rush. Whether AMD’s MI300X or Nvidia’s Blackwell sells more, TSMC fabricates both using its leading-edge 3nm and 2nm processes . That’s why ARK analyst Ali Khajeh calls it a "call option on AI infrastructure" . Financially, it’s also cheaper than AMD—trading at 25x forward P/E .

But yeah, risks exist. Geopolitical tension with China looms large. A blockade or invasion of Taiwan would disrupt supply chains catastrophically . TSMC’s mitigating this by building fabs in Arizona, Japan, and Germany—diversifying production away from Taiwan .

Why AMD and TSMC—But Not Nvidia?

Wood’s avoidance of Nvidia raised eyebrows. I mean, it’s up 180%+ in 2024 alone ! But here’s the thing: Ark sold most of its Nvidia stake in 2022–23, fearing overvaluation. By 2025, only slivers remained in ARKQ and ARKW . Wood’s style is contrarian—she hunts undervalued innovators, not incumbents near peak hype.

Nvidia’s also pricier (forward P/E ~45) than AMD or TSMC. And while CEO Jensen Huang talks up "accelerated computing" beyond AI , Wood seemingly prefers companies with clearer margin runways:

• AMD is cheaper than Nvidia and gaining data center share.
• TSMC benefits from all AI chip demand, plus it’s a geopolitical discount play

How These Fits Into Ark’s Broader AI Strategy

Wood’s not ditching her high-growth darlings like Tesla or Palantir—both up 80%+ and 380%+ in 2024 . But adding AMD and TSMC shows a pragmatist shift toward "picks-and-shovels" AI infrastructure. These are companies with robust cash flows, less exposed to software monetization risks.

It’s also a hedge against volatility. Tesla’s got regulatory risk; Palantir trades at 172x forward earnings . Semis like TSMC offer steadier demand visibility. Plus, U.S. tariffs on Chinese chips boost non-Chinese suppliers—TSMC’s expanding globally, AMD’s U.S.-based .

Ark’s semiconductor gambit mirrors its long-term thematic bets: autonomous tech (ARKQ) and next-gen internet (ARKW) both hold AMD/TSMC . Wood’s betting AI’s next phase will be hardware-accelerated—and she’s anchoring on companies building that backbone.

Risks and Challenges: What Could Go Wrong?

AMD’s battle with Nvidia is brutal. Despite its MI300X wins, Nvidia’s CUDA ecosystem (software libraries, developer tools) is deeply entrenched. If AMD can’t lure enough developers, its chips become niche products .

TSMC’s geopolitics are tricky. A Chinese invasion of Taiwan isn’t imminent, but even trade skirmishes could disrupt supplies. Also, rivals like Intel or Samsung could catch up in advanced node tech—though TSMC’s 2nm lead looks solid till 2026 .

Macro headwinds linger too. Deflation could delay AI spending; a "rolling recession" might sap corporate budgets . And tariffs? If the U.S.-China trade war reignites, costs could rise—though TSMC’s new global fabs soften this.

Cathie Wood’s Portfolio Strategy: What It Means for Investors

Wood’s moves offer clues for retail investors:

1. Follow conviction buys, not momentum: She bought AMD before its 61% surge, not after .
2. Prioritize infrastructure: TSMC’s "toll-road" model is lower-risk than unprofitable AI software plays.
3. Ignore short-term noise: Ark held TSMC despite China fears, betting long-term on AI’s expansion .

For those mirroring Ark, dollar-cost averaging into AMD/TSMC makes sense. Or consider ARKW/ARKQ ETFs—they offer diversified exposure without stock-picking stress .

FAQs: Cathie Wood’s AI Chip Stock Purchases

Q: How much AMD and TSMC did Cathie Wood buy?
A: Ark bought ~800,000 AMD shares in late June 2025 and 190,000+ TSMC shares throughout June .

Q: Why not Nvidia?
A: Ark sold most of its Nvidia in 2022–23 at lower prices. Wood likely sees better value in AMD’s growth runway and TSMC’s manufacturing monopoly now .

Q: Is TSMC safer than AMD?
A: In some ways, yes. TSMC faces geopolitical risk but has pricing power and diversified demand. AMD must out-innovate Nvidia—a tougher slog .

Q: What’s the time horizon for these trades?
A: Wood’s typically long-term (5+ years). She’s betting on AI infrastructure spending accelerating through 2030 .

Q: Should I buy AMD or TSMC today?
A: TSMC (25x P/E) looks cheaper versus AMD (36x P/E), especially if AI chip demand keeps rising. But AMD offers higher upside if it steals share from Nvidia .