Why high-conviction investor Cathie Wood bought Nvidia after it erased billions from May high

Cathie Wood's Ark Invest has bought more shares of Nvidia after the AI chipmaker slipped sharply in recent sessions, showing renewed confidence in one of the biggest names in the artificial intelligence trade. Ark Invest bought 78,965 Nvidia shares across its five largest exchange-traded funds, according to multiple media reports. The purchase was worth about $15.5 million, based on Nvidia's closing price that day.

The buying came after Nvidia shares fell more than 6% over the past five trading days. The stock is also down about 17% from its mid-May high, even though the company continues to report strong growth from artificial intelligence demand.

Wood, the founder and chief executive of Ark Investment Management, is known for buying high-growth technology stocks during sharp market falls. Her funds usually focus on companies linked to disruptive themes such as artificial intelligence, robotics, blockchain, genomics and financial technology.

That style has made her one of Wall Street’s most followed investors. It has also made her funds highly volatile. Ark's flagship Ark Innovation ETF became famous after rising 153% in 2020, when investors rushed into high-growth technology companies.

But the same fund fell more than 60% in 2022 as rising interest rates hit expensive growth stocks. In 2025, the fund gained 35.49%, beating the S&P 500’s 17.88% return. So far this year, however, the Ark Innovation ETF is down 6.38% as of July 30, while the S&P 500 is up 8.65%, according to Yahoo Finance data.

Also Read: Kospi’s mammoth 17% surge spells caution for Indian IT stocks. Why TCS, Infosys, others are down up to 5%

A Morningstar report from March 2025 said that the Ark Innovation ETF wiped out $7 billion in investor wealth between 2014 and 2024, making it the third-biggest wealth destroyer among mutual funds and ETFs in its ranking.

Wood has continued to defend her long-term approach. She has argued that investors are too focused on inflation risks and not focused enough on the deflationary impact of technology. In a June post on X, she said the bond market was increasingly reflecting the impact of innovation, especially artificial intelligence.

Nvidia remains one of the most important companies in the AI boom. Its chips are used to train and run large artificial intelligence models, and demand from data centres has driven a sharp increase in sales.

In its fiscal first quarter, Nvidia reported revenue growth of 85% from a year earlier. Its data centre business grew 92% year-on-year and remained the company’s largest sales driver. Adjusted operating income and earnings more than doubled from the same period last year.

The company has also been returning money to shareholders. Nvidia raised its dividend and has an $80 billion share buyback authorisation.

After the recent fall, some investors see the stock as more attractive. Based on current analyst estimates, Nvidia trades at about 22 times expected earnings for the current fiscal year and around 15 times projected earnings for next year.