Ark Invest is doubling down on AI chip stocks amid Tesla and Palantir volatility. The firm, led by Cathie Wood, has aggressively boosted positions in Advanced Micro Devices (AMD) and Taiwan Semiconductor Manufacturing (TSMC) across multiple ETFs.
Ark added around 800,000 shares of AMD between mid- to late June. AMD is now Ark’s 11th biggest holding. The surge aligns with a 61% rise in AMD shares since late April, driven by gains in its data center business and anticipation of new AI accelerators due later this year.
AMD trades at roughly 36 times forward earnings, still inside its usual range but not cheap. Investors remain cautious due to stiff competition from Nvidia. For now, Ark watchers might want to hold off buying AMD as prices look stretched. 
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Ark also increased its stake in TSMC in May and June, adding over 190,000 shares. Unlike AMD and Nvidia, TSMC focuses on chip fabrication, making it the go-to fab for various AI chipmakers. That gives TSMC a unique edge regardless of which AI chips win market share.
TSMC’s forward P/E stands near 25, reasonable compared to peers. The main risk is geopolitical tensions with China, but ongoing geographic expansion by TSMC should ease some concerns. Analysts see TSMC as the best bargain in AI hardware, backed by strong fundamentals and secular growth.
Adam Spatacco has positions in Nvidia, Palantir Technologies, and Tesla.
The Motley Fool has positions in and recommends Advanced Micro Devices, Nvidia, Palantir Technologies, Taiwan Semiconductor Manufacturing, and Tesla.
The Motley Fool recommends Broadcom.
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