For the first time in nearly a year, Cathie Wood has made a significant move to buy Taiwan Semiconductor Manufacturing Co. (TSMC) shares. This marks the most notable shift from her previous stance of primarily selling tsmc shares since the third quarter of last year to now actively increasing her holdings.

Data shows that Wood's flagship fund, the ark innovation ETF (ARKK), purchased 123,587 TSMC American Depositary Receipts (ADRs) on Monday (May 19), while the Ark Next Generation Internet ETF (ARKW) bought 74,189 ADRs.

Although Ark's funds had previously bought TSMC shares in February this year, this latest purchase is the largest since June 18, 2023, equivalent to 87% of Ark Investment Management's total TSMC holdings as of the end of March.

Tariff Easing & Optimistic Industry Outlook

From the basic perspective, Wood's increased investment comes as U.S.-China tariffs were cut more than expected, significantly improving market sentiment. Additionally, former U.S. President Donald Trump's recent AI agreements with three Middle Eastern countries have further boosted TSMC's business prospects, given its role as a key supplier for NVIDIA.

Market trends seem to validate Wood's shift. After falling 37% from its January peak to its April low, TSMC has since recovered more than half of those losses. Analysts predict the stock still has ~11% upside potential over the next 12 months.

TSMC's April sales report (released May 9) showed revenue of NT$349.57 billion, up 22.2% MoM and 48.1% YoY, far exceeding analyst expectations of 38% growth and accelerating from the previous month's 46.5% YoY increase.

Meanwhile, Meta and Microsoft's capital expenditures indicate strong ongoing demand for AI products, reinforcing TSMC's bright outlook. Morgan Stanley maintains an "Overweight" rating on TSMC stock.

A Strategic Move to Revive Ark's Performance?

While Wood is widely known for her aggressive bets on disruptive technologies, her flagship fund has underperformed in recent years.

Although the ARK Innovation ETF (ARKK) surged 82% over the two years ending in 2024, it remains ~63% below its peak and has lagged behind the Nasdaq Composite Index for most of the past five years.

Analysts suggest that this large-scale TSMC purchase could be a strategic move to revitalize Ark's performance by betting on a core player in the AI supply chain amid current market conditions.

Wall Street Heavyweights Also Buying TSMC

Before Wood's TSMC buying spree was revealed, recent 13F filings showed that other Wall Street titans also increased their TSMC holdings in Q1: Stanley Druckenmiller boosted his TSMC stake by 456.93%, adding 491,300 shares to bring his total holdings to 598,800 shares; HH&H International Investment, managed by investor Duan Yongping, initiated a new TSMC position in Q1, buying 271,800 shares worth $45.117 million, accounting