The market was wild -- and cruel -- on Thursday. After initially rallying on the heels of blowout results from the country's most valuable company, Nvidia (NVDA +0.20%), by market cap, a sell-off ensued. A day that started as a lock for big gains ended in substantial losses, the market's biggest single-day reversal in seven months.
You probably already know what Cathie Wood was doing as blue skies turned into storm clouds. The co-founder, CEO, and chief stock picker for Ark Invest went shopping. It was an active day for Wood and her family of exchange-traded funds (ETFs). Ark bought shares in Nvidia, Coinbase Global (COIN +1.99%), and Archer Aviation (ACHR +3.35%) on Thursday, as the shares fell between 3% and 8% by the closing bell.
Let's take a closer look at these three stocks.
Image source: Getty Images.
1. Nvidia
As the market opened on Thursday, it seemed as if Nvidia was going to single-handedly save it from its recent malaise. Bears will argue that the artificial intelligence (AI) bellwether is priced for perfection, but Nvidia's report was better than perfection.
The maker of the most popular chips going into data centers to fuel generative AI and graphics processing units (GPUs) delivered a record $57 billion in revenue for its fiscal third quarter. This is a better-than-expected 62% year-over-year jump, and an equally impressive 22% sequential step up. Even the most ardent of bulls wasn't banking on sharply acceleration from the 56% year-over-year jump it had posted in the fiscal second quarter.
NASDAQ: NVDA
Key Data Points
The cherry on top is that Nvidia isn't even operating at full strength. It's cranking out this growth while still facing trade restrictions into the world's second-largest economy, China. It's also serving up some pretty chunky margins on a consistent basis for an industry that has historically been cyclical and cutthroat. With no one close to matching the proficiency of its Blackwell-based systems, Nvidia should continue to be the dominant player in the foreseeable future.
Nvidia's 3% slide may seem tame compared to the other names on Thursday's shopping list, but it's an 8% reversal from when it opened nearly 5% higher. It wasn't guidance that was souring the mood. Nvidia's calling for $65 billion in revenue for the fiscal fourth quarter represents another healthy period of sequential and year-over-year growth.
The stock's not as expensive as you might think. With the shares retreating and analysts jacking up profit targets, Nvidia stock is now trading for a reasonable 24 times forward earnings for the new fiscal year that starts in late January. The concern here is that the heady growth -- and just as importantly, the chunky margins -- aren't sustainable. For now, you can't blame Wood for approaching the sell-off following stellar results as a buying opportunity.
NASDAQ: COIN
Key Data Points
2. Coinbase Global
If you think Nvidia's having a rough run, you only have to go back to late October to find a lower close than it clocked in at on Thursday. It could be worse.
"Hold my digital wallet," say Bitcoin (BTC 2.01%) investors.
The world's top cryptocurrency hit a seven-month low on Friday morning, and that's going to weigh on Coinbase as the leading trading platform for digital currencies. Coinbase stock has plummeted 41% from its October high and 46% from its all-time high over the summer.
Coinbase is more than just a Bitcoin trading platform, but many of the more speculative digital currencies are falling even harder. Nothing dries up interest in crypto trading like momentum turning negative, and Coinbase should feel the pinch. Analysts see year-over-year revenue sliding 14% on a brutal 75% plunge in profitability for the current quarter.
NYSE: ACHR
Key Data Points
3. Archer Aviation
Another stock the failed to take off on Thursday is Archer Aviation. The irony is that the early leader in electric vertical takeoff and landing (eVTOL) aircraft doesn't require a lot of space to get off the ground. Wood owns stakes in a couple of players in what is now a small niche of short-distance air travel.
The market is currently limited to transporting well-to-do passengers from major airports to nearby metropolitan city centers by air, when street traffic is at its worst. There are also time-sensitive applications, like the transport of vital organs to a transplant patient.
For now, the limitations rest largely on capacity and flight length. Archer's Midnight aircraft has room for four passengers beyond the pilot for travel of 100 miles or fewer. However, Archer has struck deals with airlines and the U.S. military. It will also be the official air taxi provider of the 2028 Olympic Games in Los Angeles. It's a long-term play for a pre-revenue company, but that makes buying the dips an easy call for Wood.
