Cathie Wood, the influential investor behind Ark Invest, made some intriguing trades to start the final week of February. While her transactions were relatively quiet compared to her usual aggressive plays, the few moves she did make are worth a closer look.
Her focus? Amazon, Iridium Communications, and Datadog. Wood added to her existing positions in all three, signaling confidence in their future despite recent stock fluctuations. Let’s break down why these picks caught her attention.
Amazon: A Bet on AI and E-commerce Growth
Amazon remains a powerhouse in online retail, but its ambitions stretch far beyond e-commerce. The company has been doubling down on artificial intelligence, recently investing $8 billion in AI startup Anthropic. That investment has already appreciated significantly, with Anthropic now valued at $61.5 billion after raising an additional $3.5 billion in fresh capital.
Despite its dominance, Amazon’s growth has slowed. The company reported a 10% revenue increase in the fourth quarter and 11% for all of 2024—solid numbers, but a far cry from its hypergrowth years. More concerning was its guidance for the current quarter, projecting just 5% to 9% growth, which would be its weakest performance since 2001.
Even so, Wood sees an opportunity. The stock recently hit an all-time high before falling 12%, offering a rare discount on a company that remains a key player in both retail and cloud computing. Amazon Web Services continues to expand at a faster pace than the rest of the business, and its AI investments could pay off in a big way.
One challenge? Valuation. Even after the dip, Amazon trades at 34 times expected 2025 earnings. That’s not cheap, but it hasn’t stopped Wood from buying in while sentiment is lukewarm.
Iridium: A Steady Climber in Satellite Communications
Iridium Communications might not get as much attention as big tech, but it has carved out a unique niche in satellite communications. The stock has struggled, down more than 20% from early 2023 levels, but it’s showing signs of resilience.
Revenue growth has been modest, hovering in the single digits for most of the past six years. However, its most recent earnings report showed acceleration, with a 9% revenue increase in the fourth quarter and an 8% rise in customer subscriptions. The company now serves nearly 2.5 million billable subscribers.
Looking ahead, Iridium expects its core service revenue to grow between 5% and 7% in 2025. That’s not a huge leap, but it signals steady progress in a tough market.
Why is Wood buying? It’s likely a combination of patience and long-term vision. Satellite communications remain an essential piece of global connectivity, and Iridium’s consistent (if slow) growth makes it a safer bet than many volatile tech stocks.
Datadog: A Cloud Giant with a Rough Start to 2025
Datadog has been a success story since going public in 2019, with shares more than tripling since its debut. However, 2025 has not been kind to the stock.
Shares are down 18% year-to-date, with the bulk of that decline coming in just the past week. The culprit? Disappointing guidance.
Datadog specializes in cloud monitoring, offering tools that help businesses track site downtime and analyze performance. The company’s fourth-quarter earnings report was a mixed bag:
- Revenue grew 26%, exceeding analyst expectations.
- Earnings also beat forecasts.
- However, guidance was a letdown, with management projecting flat sequential revenue growth and a slowdown to 19% annual growth in 2025.
The stock has fallen every day since the report, but Wood isn’t shying away. She’s adding to her position, likely betting that the company’s long-term prospects outweigh short-term struggles.
A Contrarian Approach Pays Off?
Cathie Wood has built her reputation on bold, high-growth bets. Sometimes they work spectacularly, sometimes they don’t. But one thing is clear: she’s not afraid to buy when others are selling.
Amazon, Iridium, and Datadog all have challenges, whether it’s slowing growth, industry headwinds, or valuation concerns. But they also have something in common—potential. Wood seems confident that these stocks will rebound, and her track record suggests investors should at least pay attention.
