Cathie Wood Goes Shopping: 3 Stocks She Just Bought

Ark Invest added to existing stakes in Broadcom, Deere and Archer Aviation, signaling conviction in Broadcom's AI-exposed semiconductor franchise and a speculative play on eVTOLs. Broadcom, now an eight-largest U.S. stock and a five-year seven-bagger, reported revenue up 44% in fiscal 2024 and 24% in fiscal 2025; analysts forecast revenue of $96 billion (+51%) and EPS of $10.14 (+49%), implying a ~33x forward P/E while the company has grown revenue for 16 consecutive fiscal years and raised its dividend for 15 straight years. Deere faces near-term weakness after warning sales to large commercial farm operators may fall ~20% while street models still expect ~2% revenue growth this fiscal year, and Archer remains pre-revenue but is projected to approach ~$1 billion in revenue by 2028 with adjusted profitability in 2029 even after a ~40% pullback since October highs.

Analysis

Market structure: Broadcom (AVGO) emerges as a consolidated winner — hyperscalers and telecoms gain leverage by outsourcing AI networking to a few large ASIC providers, increasing AVGO’s pricing power and squeezing smaller peers (Marvell/Intel). Deere (DE) benefits from structural capex in food security and infrastructure, supporting spare-parts and commodity demand (steel, copper) over 6–36 months; Archer (ACHR) lifts suppliers in composites/batteries but displaces short-haul ground transport incumbents only at scale.

Risk assessment: Key tail risks are regulatory intervention on AVGO M&A or export controls (China/Taiwan chip supply shocks), a certification or cash-runway failure for ACHR, and a sharp agricultural downturn that compresses DE margins. Time horizons: immediate (days) = sentiment swings from Ark buys; short-term (weeks–months) = earnings/guidance and FAA milestones; long-term (1–5 years) = structural AI capex and eVTOL commercialization. Hidden dependency: AVGO growth depends on 3–5 hyperscalers accounting for majority of incremental revenue.

Trade implications: Favor asymmetric positions — core long AVGO with defined stops, tactical LEAP call exposure to ACHR capped to <1% portfolio, and selective long DE as a 6–18 month rebound play if farm sales stabilize. Use pair trades (long AVGO vs short INTC/MRVL) to express secular AI-network share gains while hedging cyclicality; buy puts around earnings to hedge binary certification/event risk for ACHR.

Contrarian angles: The market may underprice regulatory and single-customer concentration risk at AVGO despite 33x forward EPS; that multiple is justified only if 2026+ revenue growth remains >30% and gross margins hold. ACHR’s 40% pullback may still understate certification/capex risk — allocate tiny optionality-sized stakes rather than conviction-weighted longs. DE could be oversold on temporary guidance weakness; a re-acceleration in farm incomes/crop prices would re-rate it within 2–8 quarters.

Key Decisions for Investors

• Establish a 2–3% long position in AVGO (core holding) with 12-month horizon; set a stop-loss at −12% and trim 50% at +30%; reduce position by half if next-quarter revenue guidance implies <20% y/y growth or EPS misses by >10%.
• Initiate a 1.5–2% position in DE sized as a tactical rebound trade (6–18 months); add on pullback to the 200-day MA or a >10% decline, target +25% if farm/commercial sales recover >10% yr/yr; hedge with a 0.5% short position in CAT if construction weakness emerges.
• Allocate a speculative 0.5–1% to ACHR via long-dated LEAP calls (Jan 2028, ~30–50% OTM) or small equity tranche; cap total exposure at 1% portfolio, exit or sell calls if FAA certification delayed beyond 12 months or cash runway falls below 18 months.
• Implement a relative-value pair: long AVGO (2%) vs short INTC or MRVL (1.5%) for 6–12 months to capture AI-networking share gains while hedging semiconductor cyclicality; rebalance monthly against order-book disclosures.
• Protect concentrated AVGO exposure with 6–9 month 10% OTM puts (buy or finance with covered calls on 1/3rd position) around earnings windows to limit downside from regulatory/guide shocks.