Why Cathie Wood's Bets on AMD, Palantir, and Amazon Are the Smart Play for the AI Revolution

In the high-stakes race to dominate artificial intelligence (AI), few investors have staked as bold a claim as Cathie Wood of ARK Invest. While the spotlight often falls on flashy AI startups or established giants like NVIDIA, Wood's portfolio reveals a contrarian strategy: betting big on underappreciated infrastructure plays that quietly power the AI boom. Three stocks stand out—AMD, Palantir, and Amazon—each addressing critical gaps in hardware, software, and logistics. Here's why these picks could deliver asymmetric upside as the AI-driven productivity revolution takes hold.

AMD: The Undervalued King of Cost-Effective AI Inference

While NVIDIA dominates AI training with its Hopper and Blackwell GPUs, AMD is quietly winning the inference battle—the process of deploying trained models to generate outputs. AMD's Instinct MI300X and newer MI350 series chips offer 40% more tokens-per-dollar than NVIDIA's GB200 accelerators, making them a top choice for hyperscalers like Microsoft (which uses MI300X for GPT-4 inference).

AMD's edge? Its hybrid CPU-GPU architecture (EPYC CPUs paired with Instinct GPUs) cuts cloud providers' costs by 30%+ compared to GPU-only setups. Despite this, AMD trades at just 11.5x forward EV/EBITDA, half NVIDIA's valuation.

ARK Invest's focus here is clear: AMD's 40-50% annual AI revenue growth (projected through 2026) isn't yet priced in. With China's AI infrastructure boom (despite export restrictions) and hyperscalers like AWS and Azure expanding data centers, AMD's cost leadership is a structural advantage.

Palantir: The AI Platform Scaling Across Industries

Palantir isn't just a government contractor anymore. Its AI Platform (AIP) embeds autonomous agents into workflows, automating everything from healthcare diagnostics (Cleveland Clinic) to defense logistics (NATO's $795M Maven contract).

The numbers are staggering: U.S. commercial revenue grew 71% YoY in Q1 2025, with total contract value up 239%. AIP's “hours-long deployment times” (vs. years for legacy systems) are unlocking new markets—from retail (Walgreens' 4,000-store AI rollout) to finance (AIG's agentic AI ecosystem).

Critics cite Palantir's 108.7x P/S ratio, but its 44% adjusted operating margin and $5.4B cash hoard suggest pricing power. Wood's bet? That Palantir's $6.5B revenue run rate by 2027 (vs. $2.8B in 2024) will justify the premium as AI becomes a “SaaS-like” operational necessity.

Amazon: The Robotics-AI Hybrid Powering the Logistics Future

While headlines focus on Amazon's e-commerce struggles, its AI-robotics fusion is a game-changer. Deploying its 1 millionth robot globally, Amazon uses DeepFleet—a generative AI system—to boost robot efficiency by 10%, cutting delivery times and costs.

The AI recommendation engine already drives 35% of Amazon's sales, but the underappreciated win is in logistics: same-day delivery now reaches 80% of U.S. customers, up from 50% in 2023. Amazon's $164B Q2 revenue guidance (up 9%) includes silent contributions from AI-powered inventory forecasting and fraud detection.

Wood's angle? Amazon's $189B AWS backlog (up 20% YoY) and 20% operating margin growth signal a shift from a “commodity retailer” to a cloud-AI-logistics powerhouse. The stock's $244.96 analyst target assumes this transition, but risks like unionization and antitrust scrutiny remain.

Why Now? The AI Productivity Boom Is Just Beginning

Cathie Wood's thesis hinges on asymmetric risk-reward:
- AMD is a valuation bargain in a $150B AI chips market.
- Palantir is underestimated in enterprise AI, where trust and scalability matter more than bells and whistles.
- Amazon is mispriced for its robotics-AI synergy, which could redefine e-commerce economics.

The risks? Near-term headwinds like AI regulation or economic slowdowns. But with $15B in cumulative R&D investments across these three stocks and $340B+ in market cap, the infrastructure is already in place.

Investment Takeaway: Buy the Dip, Hold for the Boom

• AMD: Target $110–$120 (currently ~$85). A pullback post-earnings offers entry.
• Palantir: $30–$35 range (current ~$28). Wait for post-Q2 earnings volatility.
• Amazon: $120–$130 (current ~$115). Focus on AWS and robotics metrics.

These aren't just stocks—they're stakes in the AI backbone of the next decade. Cathie Wood's contrarian bet? They're all still undervalued.

The AI revolution isn't about flashy apps. It's about who controls the infrastructure. AMD, Palantir, and Amazon are the quiet winners.

Data as of July 2025. Past performance ≠ future results. Consult a financial advisor before investing.