Cathie Wood added to stakes in Broadcom, Klarna and Kodiak AI on Wednesday.
Broadcom has become a popular AI company, but it’s still cheaper than you think.
Klarna hopes to make a splash in the growing but crowded buy now, pay later space.
10 stocks we like better than Broadcom ›
Coming off a booming year for the market, aggressive growth icon Cathie Wood is hoping to keep the momentum going in 2026. The co-founder, CEO and chief investment officer of Ark Invest announces all trades in its exchange-traded funds (ETFs) a few hours after the end of each trading day.
She was relatively quiet on Wednesday, investing in just three stocks. Ark purchased shares Broadcom(NASDAQ:AVGO), Klarna(NYSE: KLAR)and Kodiak Artificial Intelligence(NASDAQ: KDK)increasing her existing stakes. Let’s take a closer look at Wood’s latest purchase.
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Broadcom reported better-than-expected financial results last month, and you didn’t have to look too hard to find the catalyst behind its accelerated growth. Revenue rose 28% in the fiscal fourth quarter ended in November, driven by a 74% surge in AI semiconductor revenue.
Revenue grew 24% this fiscal year, slightly more than half the 44% growth seen in the same period last year. Broadcom wasn’t at its peak a year ago: Analysts expect revenue to rise 51% in the company’s fiscal year, which began last month. Broadcom stock is perfectly positioned at the technology intersection that accounts for 99% of global Internet traffic.
The semiconductor and technology infrastructure solutions provider also increased its dividend last month. This was in the headlines a few years ago, when it was a sleeper tech stock with a dividend yield of over 5%. With shares in the AI sector soaring, it’s no surprise that the yield has fallen below 0.8%.
It’s not that spending is down. Broadcom has now increased its quarterly distribution rate for 15 consecutive years. The stock is growing faster than its gains, but one could also argue that its financial growth is outpacing the stock’s growth. The opportunity Wood may see here is the recent pullback. Broadcom shares are currently trading nearly 20% below recent highs, including a 4% drop when she bought on Wednesday.
Broadcom may look expensive initially, even after the pullback. It trades at 71 times earnings. Too steep. However, profitability is rising significantly. expect Next This year, Wall Street’s fiscal 2027 profit target per share has risen from $12.14 to $14.08 in the past three months. The same stock trades at more than 70 times last year’s earnings, while its next fiscal year’s net profit forecast is reasonably priced at 24 times.
If a hot stock that’s on hold catches Wood’s eye, imagine a failed IPO. Klarna is a fast-growing player in the trendy but crowded buy now, pay later (BNPL) space. It will be available in September for $40. Four months later, you can buy it for around $30 per share.
Klarna launched three months ago for $40. The UK-based but globally minded company entered the new trading week with its shares 22% below its IPO price. It would be great if you could have a PNBL platform (pay now, buy later) to buy failed IPOs.
There are many players in this space, but most of them have plenty of room to continue growing. As a public company, Klarna’s first-quarter revenue grew 28% and 25% year-on-year, which is still impressive. Klarna’s business is growing faster in its core markets of the United States and Europe. However, Klarna stock reported a healthy 28% revenue growth in its first quarterly report as a public company. The global player is growing even faster in its core U.S. and European markets. Klarna’s total merchandise transaction volume on the platform in the quarter was $32.7 billion, which is not small. If it continues to grow at an impressive pace, it’s unlikely that it will remain a failed IPO for long.
You may be aware of some self-driving car stocks. But Kodiak AI is probably not on your radar. Its market capitalization is just $1.6 billion.
Kodiak’s core product is the Kodiak Driver, a virtual driver that leverages artificial intelligence-driven self-driving vehicle technology to enable fully driverless operation. We’re not talking about personal robot taxis. The product is aimed higher, deployed in commercial trucking and public sector applications.
Its fleet only has 10 trucks, and it’s not even Kodiak’s fleet. These are vehicles owned by customers who pay Kodiak for technology that allows them to make money without having to sit in the cab of the vehicle. Sound cool? certainly. Sound dangerous? Its platform has logged more than 3 million miles, including more than 5,200 hours of paid driverless operation.
The company is still in the early stages of its growth trajectory, but earlier this year it secured at least one endorsement from a Wall Street backer. Northland kicks off 2026 with one of their top picks. The company believes Kodiak has cracked the dummy driver code, which is the most difficult part of the process. Now it’s up to how quickly the company can scale its fleet on its platform. Northland’s $17 price target implies 82% upside potential.
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Rick Munarriz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Klarna Group. “Motley Fool” recommends Broadcom. The Motley Fool has a disclosure policy.
Cathie Wood Buying the Dips: 3 Stocks She Just Bought was originally published by The Motley Fool
