Cathie Wood normally thrives in a bull market, but this year hasn't played out that way. The founder CEO of Ark Invest is seeing flat returns for its largest exchange-traded fund in 2026, falling short of the general market's 10% gain.
She's not going to rest until she gets back to beating the market again. Wood publishes Ark Invest's transactions at the end of every trading day, so we know what she's buying. Ark added to existing positions in Amazon (AMZN +3.23%), Kratos Defense & Security Solutions (KTOS 0.59%), and Tempus AI (TEM +3.87%) on Wednesday. Let's take a closer look at these three stocks.
Image source: Getty Images.
1. Amazon
The country's largest company, at least in terms of trailing revenue, has been flirting with joining the $3 trillion market cap club this month. It should get there eventually, but the real prize is higher milestones for long-term investors.
Amazon's biggest driver is no longer its namesake online marketplace. The real star of the show these days is Amazon Web Services (AWS). The cloud hosting platform is a leader in a category that's booming in the wake of the AI revolution. AWS accounts for just a fifth of Amazon's total net sales, but more than half of its operating profit.
NASDAQ: AMZN
Key Data Points
As large as Amazon may be, business is accelerating. The 17% increase in net sales it posted in its latest quarter is a four-year record for the widely followed growth stock. A 28% year-over-year gain for its high-margin AWS business led the way higher.
The key to AWS's success is the many deals it's striking with AI leaders, including OpenAI and Anthropic, as well as current and future tech giants. UBS put out a bullish analyst note on Amazon on Wednesday, arguing that its healthy backlog of orders bodes well through the near term at least. UBS analyst Stephen Ju has a $333 price target on Amazon, suggesting near-term upside of 22%, or a market cap approaching $3.6 trillion.
As if on cue, Snowflake (SNOW +0.56%) announced after the market close on Wednesday that it was collaborating on a multiyear deal with Amazon. Snowflake, riding high from blowout numbers in its after-hours report, is committing $6 billion in spending on AWS. For Amazon stock, these 10-figure commitments keep happening with a frequency that's refreshingly growing.
NASDAQ: KTOS
Key Data Points
2. Kratos Defense & Security Solutions
At least seven analysts have lowered their price targets for Kratos this month, following a disappointing financial update. It exceeded expectations and raised its full-year top-line guidance. However, its revenue forecast for the current quarter was below where the Wall Street pros were perched.
One would expect demand to be on the rise for a provider of military solutions for drone and missile defense systems as things heat up overseas. Revenue is growing, but profitability has been light. Its trailing net margin of 2.1% isn't very impressive, and that is Kratos' strongest showing in more than five years. The stock has actually shed about a quarter of its value so far in 2026. Wood naturally sees a buying opportunity here.
NASDAQ: TEM
Key Data Points
3. Tempus AI
Kratos isn't the only company on this list that posted an earnings beat earlier this month, boosted its revenue guidance, and still left the market unimpressed. Tempus is a provider of AI solutions for oncology and hereditary products.
Revenue growth decelerated in its latest quarter, but it still beat expectations. Investors who bid up Tempus shares last year have been cashing out this year, as the stock has fallen 20%. Zoom out to the all-time highs it scored in October, and the shares have been cut in half. As with Kratos, Wood sees pullbacks on stocks she likes as a compelling time to add to those stakes.
