Cathie Wood Bets Software, Not Chips, Will Capture AI’s Next Wave

Cathie Wood is shifting her AI bet from chips to software. Recent filings show ARK Invest bought 85,485 shares of Palantir (PLTR) worth $11.15 million while selling 44,446 shares of Advanced Micro Devices (AMD) worth $10.52 million. The move signals a strategic pivot: from hardware powering AI to the platforms applying it.

Palantir’s latest revenue jumped 70% year-over-year to $1.407 billion, beating estimates, with adjusted EPS of $0.25 also exceeding expectations. The company raised its full-year 2026 revenue guidance to $7.182–$7.198 billion, a 61% growth rate. That momentum continued to attract Wood even after Michael Burry criticized the stock’s valuation, triggering a 5% drop.

Meanwhile, AMD reported $10.27 billion in revenue, up 34.1% year-over-year, with adjusted EPS of $1.53 above forecasts. Demand for its AI chips remains strong, lifting the stock 15% year-to-date. Yet Wood reduced her stake ahead of its May 5 earnings report, suggesting she may be locking in gains on hardware just as she leans into software.

Analysts on TipRanks give both stocks a Moderate Buy rating. But the upside divergence is stark. Palantir’s average price target is $194.61, implying 52% upside. AMD’s target is $284.68, pointing to 16.18% growth. Wood’s trade aligns with the higher-conviction forecast — not in raw performance, but in where the next wave of value will accrue.

Her bet: AI’s returns are shifting from the silicon layer to the application layer, where data becomes decisions.