Cathie Wood is famous for making bold moves when others are nervous. This week, she did it again. ARK Invest snapped up 107,661 shares of Nvidia (NASDAQ:NVDA) and spent about $12.2 million, right after the stock had been battered by a broader tech selloff and worries about competition from China and new U.S. chip export rules. Wood’s buying spree also included AMD (NASDAQ:AMD).
NVDA stock has lost around $770 billion in market value since it peaked out, and that’s despite the company posting 114% revenue growth to $130.5 billion in fiscal 2025, and Blackwell chips still being sold out for the rest of the year.
Ostensibly, there are no problems here if you take out the tariffs. And considering the trade talks with China seem closer than ever, this might be what finally prompted Wood to double down. ARK also bought shares through several other funds, including its flagship ARK Innovation ETF (ARKK), with the total investment reaching nearly $24 million when combined with simultaneous AMD purchases.
Wood's purchases coincide with positive signals from former President Trump's team about potentially reversing chip export limitations that were implemented during the Biden administration. The current regulations aim to prevent advanced AI chips from reaching China through third-party countries. However, Trump has significantly softened up his stance on China, and he has even struck down a Biden-era chip rule that would’ve caused Nvidia massive revenue losses. Tariffs are already expected to cause a $5.5 billion charge and tens of billions in lost revenue in the long run, but that’s likely priced in at current prices.
The moat is still wide as the company controls an estimated 80% of the AI accelerator market, and its CUDA software ecosystem is deeply embedded in the workflows of major cloud providers and AI startups. Major customers like Microsoft (NASDAQ:MSFT), Meta (NASDAQ:META), and Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) are ramping up AI spending, and Nvidia’s latest earnings beat expectations, even if the stock didn’t react positively right away.
If you believe in the long-term future of AI, Nvidia is still the best pure play. Buying when the market is fearful has often paid off for patient investors, and Wood’s big bet suggests she sees this as one of those moments.
That said, I’d be more careful in the short term, even though things still look up for Nvidia. Huawei is starting to catch up with its Ascend chip series as a direct alternative and is already supplying samples. China constitutes 13.1% of Nvidia’s revenue directly, whereas Singapore constitutes 18.1%. A notable chunk of Singapore-derived revenue is thought to be China-bound chips.
If 1. Chip restrictions get worse as part of a single big package, as the Trump administration has said. Or 2. Huawei’s chips are as good as reported and start capturing the Chinese market, which will hurt Nvidia’s fundamentals enough to drag down NVDA stock significantly.
As such, I’d buy the dip while having some hedging bets, but I wouldn’t “double down” on NVDA stock.
