On Monday, trading activity increased at Arch Invest. The family of aggressive growth exchange-traded funds (ETFs) started the new trading week with the busiest day of 2026, in terms of the number of stocks it bought.
With Cathy Wood at the helm, Arc is always on the lookout for price asymmetries. The recent volatility will bring out the shopper in the co-founder and CEO of Ark Invest.
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Of the many stocks Wood bought for Arch on Monday, three names stood out to me CoreWeave (NASDAQ: CRWV ), Datadog (NASDAQ: DOG )and Circle Internet Group (NYSE: CRCL). All three were his previous positions in ETFs. Let’s take a closer look at three new purchases.
CoreWeave is one of two stocks in Wood’s shopping bag that weren’t even publicly traded a year ago. The artificial intelligence (AI) infrastructure play hit the $40 per share market in March. After a slow start, investors were drawn to the story and potential of CoreWeave.
As a hyperscaler, CoreWeave offers optimized data center solutions for resource-intensive AI workloads. Shares went on to trade as high as $187 in the summer, but they are now trading for less than half that.
CoreWeave stock has an interesting origin story. It was started by hedge fund traders who pooled money to buy GPUs to mine crypto. It was a side business while they worked.
After a particularly challenging crash in cryptocurrencies several years ago, hedge fund managers were at a crossroads: Do they cut their losses and sell their GPUs, or do they take advantage of the fact that many people think the same thing and make the most of the fire sale to expand their arsenal? They chose the latter, and it has paid off.
At the time, they figured they could use the power of their GPUs to help movie studios crank out special effects and potentially ride the initial wave of AI. Once again, the latter choice has paid off. Not going to Hollywood has opened up a more lucrative field for the hyperscalar revolution.
Trailing revenue has more than tripled for CoreWeave. This kind of growth isn’t sustainable, but looking at 136% top-line growth for 2026, it’s not too shabby either. Its order backlog nearly doubled from last year — to $55.6 billion — with room to run for a company with just $4.6 billion in subsequent revenue.
The good news is that Datadog has more than tripled since going public in 2019. The bad news is that almost the entire boom occurred in its first two years of business. Shares of the enterprise software provider, which offers cloud monitoring and other business technology modules, have risen by less than 30% over the past five years. Recent investors have made it worse, as Datadog stock has shed 36% of its value since peaking in October.
Many software companies have seen their valuations decline over the past few weeks, as investors consider the disruptive nature of AI as a coding platform. However, even as the investor community began to treat AI as a headwind rather than an opportunity, Datadog and many of its peers were seeing their growth rates decline.
Datadog’s revenue has grown 27% over the past four quarters. This would be respectable for most companies, but Datadog regularly posted top-line growth of more than 60% in its first few years of business. Datadog has failed to top 30% revenue growth in each of the past three years, and analysts see business slowing to 21% growth in the year since launch.
Datadog still continues to provide an essential toolbox for its customers. Wood likely expects the stock selloff to not last.
Finally, we have another company that – like Datadog – is facing near-term pressures. Like CoreWeave, Circle Internet Group went public in 2025. It hit the market in June at an IPO price of $31. The stock goes on to become nearly a 10-bagger in a matter of weeks, but shares have fallen 80% from that sudsy peak.
Circle is an issuer of stablecoin products. It also provides blockchain solutions for the crypto industry. The recent market slowdown in digital currencies is problematic in the near term.
Circle was beginning to pick up momentum, seeing revenue growth jump from 53% in the second quarter to 66% in the third, its first full quarter as a public company. Shares are still trading well above their original IPO price point, but the big markdown from its summer highs makes it an attractive buy for Wood right now.
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Rick Munaridge has no position in any of the stocks mentioned. The Motley Fool has posts and recommends Datadog. Motley Fool has a disclosure policy.
Kathy Wood Goes Bargain Hunting: 3 Stocks She Just Bought was originally published by The Motley Fool
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