As CEO and chief investment officer of Ark Invest, Cathie Wood might be best known for her high conviction in speculative opportunities across industries such as genomics and cryptocurrency.

When it comes artificial intelligence (AI), many of Ark’s biggest positions are in volatile stocks such as Tesla and Palantir Technologies. Over the last couple of months, however, Wood has quietly been rounding out her exchange-traded funds (ETFs) with semiconductor stocks.

Let’s explore two AI chip stocks that have recently become rising stars in the Ark portfolio. Is now the time to follow Wood’s moves? Read on to find out.

1. Advanced Micro Devices

While Advanced Micro Devices (AMD -0.45%) has been part of Ark’s portfolio for quite some time, the investment firm began aggressively adding to its position throughout late April and most of May.

According to public trading data, Ark added approximately 800,000 shares of AMD between June 17 and 30. The position is spread across the Ark Autonomous Technology & Robotics ETF, Ark Next Generation Internet ETF, Ark Fintech Innovation ETF, and Ark Innovation ETF. As of this writing, AMD has now become the 11th biggest position for Ark Invest overall.

In fairness, AMD’s rise at Ark has been influenced by some pronounced share price gains in recent weeks too. Since Ark began adding to its AMD position in late April, shares have gained roughly 61%.

In my eyes, AMD’s recent gains can be tied to the company’s accelerating data center business as well as bullish anticipation for its new AI accelerators during the second half of this year.

Data by YCharts.

Nevertheless, even with such a massive move in the share price, AMD trades for roughly 36 times forward earnings. Although this isn’t exactly cheap, shares of AMD are well within their usual valuation range.

My hunch is that AMD is still being discounted by some investors, primarily due to the enormous competitive threat the company faces from Nvidia.

Considering how much momentum is fueling AMD stock right now, I think I’d sit on the sidelines for the time being. To me, the company’s long-term prospects are somewhat ambiguous so long as Nvidia remains king of the chip industry. While there is likely still good money to be made in AMD stock, there are more reasonable price points to build a position.

Image source: Getty Images.

2. Taiwan Semiconductor Manufacturing

Ark complemented its AMD purchases with some exposure to Taiwan Semiconductor Manufacturing (TSM 0.75%) back in May. The firm doubled down on this decision by adding over 190,000 shares of TSMC throughout June.

I see TSMC as the most interesting opportunity within the broader chip landscape. Unlike Nvidia, AMD, Broadcom, or the cloud hyperscalers, TSMC doesn’t specialize in designing its own chipsets. Rather, the company offers industry-leading fabrication services that bring semiconductor designs to life.

This puts TSMC in a unique position as the company stands to benefit from rising spend in AI infrastructure over the coming years, regardless of which specific chipsets are witnessing the most demand.

Looked at another way, investors in TSMC need not overanalyze which chip company will sell the most graphics processing units (GPUs). Rather, an investment in TSMC could be viewed similarly to a call option on ongoing investment in data center infrastructure and AI chips for the long term.

Data by YCharts.

While TSMC has witnessed some notable valuation expansion throughout the AI revolution, the company’s forward price-to-earnings (P/E) multiple of 25 is still reasonable. Unlike AMD, I do not think rising competition is what concerns investors over a position in TSMC, though.

Rather, it’s geopolitical tensions with China that give way to uncertainty over TSMC’s growth prospects. Given the company’s ongoing investments in geographic expansion, though, I think the concerns over China are exaggerated and likely baked into the stock at this point.

As I wrote a few weeks ago, TSMC might be the best bargain in the AI market right now. Compelling secular tailwinds, combined with an industry-leading position in the fabrication market, strong institutional backing, and a reasonable valuation, make TSMC a no-brainer for long-term investors.

Micron Technology (MU -0.77%) is having a woeful April as shares of the memory specialist have dropped 20% so far this month, and the tariff-fueled turmoil has a lot to do with the stock’s recent pullback. Reports suggest that Micron could increase the prices of its memory products amid the ongoing tariff war. That’s because Micron has a global manufacturing footprint, including factories in the U.S., Japan, Taiwan, and China.

However, semiconductors have been exempted from tariffs by both the U.S. and China (at least so far). Additionally, the Trump administration has put a 90-day pause on imposing reciprocal tariffs on most of its trade partners who would have otherwise been subjected to higher tariff rates. Also, the administration has exempted imports of memory chips and hard drives from China.

As such, Micron may not need to raise the prices of its offerings, a move that may have hurt the demand since its customers would have had to contend with increased costs. What’s more, Micron’s memory products are witnessing such strong demand that the company is finding it difficult to produce enough of them. This was evident from the company’s impressive numbers in the previous quarter, as well as its bright outlook for the current one.

Let’s take a closer look at the reasons why buying Micron stock following its latest pullback seems like a smart thing to do.

Micron is too cheap to ignore right now

For a company that delivered a 38% year-over-year increase in revenue in the previous quarter, along with a 3.7x jump in earnings, Micron’s valuation makes it worth buying hand over fist right away. The company is trading at less than 17 times trailing earnings. Its forward earnings multiple of 10 is even cheaper.

The tech-laden Nasdaq-100 index, meanwhile, has a trailing price-to-earnings ratio of 27 and forward earnings multiple of 23. Micron, therefore, is significantly cheaper right now, considering the phenomenal growth that it has been delivering in recent quarters.

MU Revenue (TTM) data by YCharts

Even better, Micron is incredibly cheap when we take its potential earnings growth into account. The stock has a price/earnings-to-growth ratio (PEG ratio) of just 0.15 based on the projected earnings growth it could deliver over the next five years, according to Yahoo! Finance. The PEG ratio is calculated by taking a company’s future earnings growth potential into account, and a reading of less than 1 indicates that a stock is undervalued.

So, Micron’s PEG ratio suggests that it is very cheap, considering the expected growth it could clock over the next five years, driven by the deployment of AI infrastructure and devices capable of running AI workloads.

AI proliferation is set to drive healthy growth in memory demand

Micron is benefiting from the fast-growing demand for high-bandwidth memory (HBM) chips used in graphics processing units (GPUs) to run artificial intelligence (AI) workloads in data centers. The company’s data center revenue tripled year over year, with HBM alone accounting for a record $1 billion in quarterly revenue.

Micron says that its HBM shipments exceeded expectations. What’s more, the company has sold its entire HBM capacity for 2025, and it is currently “focused on growing HBM capacity in our existing manufacturing facilities to meet requirements through 2026.” Another factor worth noting here is that Micron has raised its total addressable market (TAM) estimate for HBM to $35 billion for 2025.

That figure is likely to head higher in the long run, with one third-party estimate putting the size of the HBM market at almost $86 billion in 2030. So, Micron’s data center business still has a lot of room for growth in the long run on the back of solid HBM demand. But this isn’t where the company’s AI-related catalysts end.

Micron’s memory products are also used in smartphones and personal computers (PCs). The usage of memory in both these applications is rising thanks to AI. Specifically, Micron says that the dynamic random access memory (DRAM) content in AI-enabled PCs is a third more than the average content used in PCs last year. Meanwhile, flagship AI smartphones are using 50% more DRAM than the 8 gigabytes (GB) of DRAM seen in 2024 models.

It is worth noting that the shipments of both AI-capable smartphones and PCs are expected to jump at an annual pace of almost 35% through 2029. This could pave the way for stronger growth in Micron’s memory shipments in the long run, complementing the healthy growth in the company’s data center business.

As such, Micron Technology’s prospects seem robust, and the semiconductor stock’s valuation means that investors can buy it at very attractive levels right now, and they may not want to miss this opportunity since the company’s outstanding growth could help it overcome its recent slump and fly higher in the long run.

Taiwan Semiconductor Manufacturing (TSM -3.59%), popularly known as TSMC, is the world’s largest semiconductor foundry, which fabricates chips for the top consumer electronics companies and chip designers across the globe. That explains why it has been growing at an impressive pace over the past couple of years.

The world’s leading companies, such as Nvidia, AMD, Broadcom, Sony, and Apple, tap TSMC’s plants for manufacturing chips that power personal computers (PCs), smartphones, data centers, and gaming consoles, among others. As a result, TSMC is in a solid position to benefit from the secular growth of the global semiconductor market, which is expected to hit $2 trillion in annual revenue in 2032.

That would be more than triple the $656 billion in revenue that the semiconductor industry generated last year. However, TSMC stock has been caught in the tariff turmoil of late, which explains why it is down more than 20% in 2025 as of this writing. But this pullback has made TSMC a terrific bargain.

Let’s look at the reasons why buying TSMC looks like a no-brainer right now.

TSMC is making the right moves to maintain its dominance

TSMC enjoys a massive lead in the foundry market with an estimated share of 67%, according to Counterpoint Research. That figure has been heading higher in recent quarters. Specifically, TSMC’s foundry market share increased by six percentage points in 2024. Meanwhile, second-placed Samsung lost ground in this market as its share shrank by three points to 11%.

A key reason why TSMC has been able to open such a huge gap over rivals in the foundry market is because of its technological advantage. TSMC’s advanced process nodes allow its customers to manufacture powerful and power-efficient chips. For example, TSMC’s 3-nanometer (nm) node is considered to be the most advanced chip manufacturing technology.

This process node is being used to manufacture smartphone chips and PC processors by the likes of AMD, MediaTek, Apple, and Qualcomm. Now, it looks like Nvidia will tap TSMC’s 3nm process node to manufacture its next-generation Rubin graphics processing units (GPUs). Looking ahead, TSMC is looking to push the envelope further in chip manufacturing technology with the 2-nanometer process.

The company is expected to start mass-producing its 2nm processors in the second half of this year, which could put it ahead of rivals Samsung and Intel. Meanwhile, TSMC is also looking to diversify its global presence. The company has pledged an investment of $165 billion in the U.S. to build advanced chip manufacturing facilities that will power artificial intelligence (AI) applications.

It is worth noting that TSMC already fabricates chips for the leading AI semiconductor companies such as Nvidia, Broadcom, and Marvell, and its focus on boosting investments in advanced technologies should allow it to maintain its dominant position in the global foundry market. Additionally, TSMC’s strategy of diversifying its global manufacturing footprint in countries such as Japan, the U.S., and Europe could turn out to be a smart move in the long run as it could help it mitigate the challenges arising out of potential trade-related conflicts, such as the one we are witnessing right now.

So, it won’t be surprising to see TSMC remaining the top semiconductor foundry for a long time to come, and that’s expected to translate into robust financial growth for the company.

A huge addressable market suggests TSMC is built for healthy growth

TSMC finished 2024 with $90 billion in revenue, an improvement of 30% from the prior year. The company has got off to a stronger start in 2025, recording a solid 42% jump in revenue in the first three months of the year to $25.6 billion. That’s better than what the market was anticipating. Analysts expect TSMC’s growth to gain momentum as the year progresses, as evident from the chart below.

TSM Revenue Estimates for Current Fiscal Year data by YCharts

What’s more, the chart above also tells us that TSMC is on track to deliver robust growth over the next couple of years as well. Importantly, it won’t be surprising to see the company sustaining its solid growth for a much longer period in light of the points discussed in the article. The semiconductor market is set to grow at an impressive pace, and TSMC itself sees a total addressable market worth almost $250 billion in its foundry and packaging services.

That figure could be bigger in the future as the size of the semiconductor market keeps growing. Not surprisingly, TSMC management expects to maintain an annual revenue growth rate of 20% for the next five years, which should translate into robust bottom-line growth as well. All this makes TSMC a top semiconductor stock to buy right now as it is trading at just 22 times trailing earnings and 17 times forward earnings, which is a nice discount to the tech-laden Nasdaq-100 index’s forward earnings multiple of 27 (using the index as a proxy for tech stocks).

The Nasdaq index is now in correction territory, meaning it is now more than 10% down from its all-time high. While this may seem like a big deal, 10% corrections tend to occur just about every year, so this is something that investors must understand happens quite frequently.

Because this happens regularly, investors shouldn’t panic; instead, it’s time to start looking for bargains that could be even more heavily hit than the broader market. My biggest value to buy right now is Nvidia (NVDA 6.24%), one of the best artificial intelligence (AI) stocks out there. At this writing, it’s down nearly 30% from its all-time high and looks like a dirt-cheap bargain.

Nvidia’s stock is going through the biggest drawdown during its multiyear run

Nvidia makes graphics processing units (GPUs), which are used for arduous computing tasks. Because they can process multiple calculations in parallel, they are well suited for tasks like AI training. While there are other competitors in the GPU space, Nvidia’s options are superior in multiple ways, and it has become the clear pick in this space.

With companies investing billions in their AI infrastructure, Nvidia has become the primary beneficiary of this spending, which has caused its stock to rocket higher over the past few years. At its peak, Nvidia’s stock was up 922% since the start of 2023. That’s an incredible run, and it’s one of the main reasons why the stock is being sold off so aggressively. Investors want to take profits before they disappear, so this sell-off disproportionately affects Nvidia. However, plenty of tailwinds are pushing Nvidia higher, and investors need to take advantage of the biggest sell-off the stock has seen since its run began in 2023.

NVDA data by YCharts

Nvidia will be all right even if the market has its doubts

2025 is slated to be a record year of capital expenditures from many of the big tech companies. The vast majority of this expense is going toward building out AI computing capacity, which will benefit Nvidia. Furthermore, Nvidia’s latest chip architecture, Blackwell, is starting to become more widely available, which means some clients may be upgrading their existing GPUs with more advanced versions.

These are all positive effects for Nvidia’s stock, and they add to Wall Street’s projection that Nvidia’s revenue will rise 56% to $204 billion this year. However, the big caveat here is that it will require big tech companies to continue spending a lot of money to reach that projection. The fear is that economic weakness brought on by trade wars could cause these AI hyperscalers to cut their spending, which would harm Nvidia.

However, I don’t see that playing out, as each company competes to establish AI supremacy. If they see a competitor get worried about economic conditions and cut spending, it may encourage them to continue their spending levels to gain ground. Many of these companies have massive cash flows and huge cash piles, so it is also not a big deal to continue spending like this.

While it may concern some investors in the short term, it’s in every company’s best interest to continue investing in AI resources over the long term, which will benefit Nvidia.

As a result, I think Nvidia’s stock is still a buy here, especially given its current price tag.

The stock looks like a great deal right now

During Nvidia’s run, the stock has seldom been considered cheap. However, I think we’ve reached that point, as it now trades for 36 times trailing earnings and 24 times forward earnings.

NVDA PE Ratio data by YCharts

That’s the cheapest Nvidia has been in some time, and I think investors need to take advantage of it while it is fairly cheap. I’m not sure when this sell-off will end, but I know that Nvidia will emerge relatively unscathed on the other side (at least from a business perspective) due to the massive AI investments that are occurring.

I think Nvidia is a fantastic stock to buy here, but I wouldn’t be surprised if the market continues to decline until some positive headlines pull it out of the decline.