TLDR
- Cathie Wood’s Ark Invest bought more shares in AMD, Toast, and Ibotta on Wednesday
- AMD stock dropped 6% despite beating revenue expectations with 32% growth to $7.7 billion
- Toast fell 4% after initial gains, though it serves 148,000 restaurant locations (24% increase)
- Ibotta is down 44% this year and reports earnings next week with low growth expectations
- Wood appears to be buying stocks at lower prices after market sell-offs
Cathie Wood’s Ark Invest purchased additional shares in three growth stocks on Wednesday. The investments came after the companies faced market pressure despite mixed earnings results.
Advanced Micro Devices saw its stock drop 6% on Wednesday after reporting quarterly results. The chip maker posted revenue growth of 32% to a record $7.7 billion. This beat analyst expectations of 27% growth but marked the first quarter of slowing growth after four periods of acceleration.
AMD’s adjusted earnings per share fell 30% year-over-year to $0.48. The result only met analyst estimates after a streak of quarterly beats. Wood had bought AMD shares on Monday ahead of the earnings report, betting on positive market reaction.
The company’s data center segment grew 14% to $3.2 billion, accounting for less than 42% of total revenue. AMD’s client and gaming segment jumped 69% and carried more of the growth load this quarter. Management guided for 28% revenue growth in the current quarter.
At least a dozen analysts raised their price targets on AMD following the results. The company could see additional upside if trade restrictions with China ease, allowing shipments of Instinct MI308 GPUs.
Restaurant Platform Toast Faces Reversal
Toast initially gained as much as 7% after reporting earnings but ended Wednesday down 4%. The restaurant technology company serves 148,000 locations, up 24% from a year ago. Gross payment volume increased 23%, slightly less than the restaurant count growth.
Revenue rose 25% while the annualized recurring run rate grew 31%. Net income jumped fivefold compared to the previous year. The company continues expanding beyond payment processing into a broader enterprise solution for restaurants.
Toast stock remains up 35% year-to-date despite Wednesday’s decline. The platform’s sticky nature helps retain restaurant customers who use multiple features beyond basic payment processing.
Ibotta Down Sharply This Year
Ibotta was the only stock among the three to gain on Wednesday. The cash-back rewards app company has fallen 44% this year ahead of earnings next week. The stock peaked at $79.80 in its 52-week range but now trades around $33.33.
The company grew revenue 52% in 2023 but slowed to 15% growth last year. Management expects just 2% revenue growth for the second quarter along with declining adjusted EBITDA. Ibotta is shifting from direct-to-consumer to third-party models.
The transition brings more users to the platform but with lower engagement than the original customer base. Analysts project a return to double-digit revenue and earnings growth in the second half of 2025 and through 2026.
Wood’s Ark Invest ETF has gained 42% over the past three months and 79% over the past year. The fund performs best during growth stock rallies.
Ibotta reports second-quarter results next week with guidance calling for minimal revenue growth and declining profitability metrics.
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