Famous growth investor Cathie Wood likes to invest in disruptive technology stocks, and investors like to see what she has on the table. Sometimes it’s her tried and tested tips like Tesla And Teladoc Healthand sometimes it is an under-the-radar IPO like Tempus AI.

A stock that you don’t normally find in Ark Invest’s recommendations is Amazon (AMZN -0.30%)But Cathie Wood’s investment firm was buying stocks like they were going out of style last week. Let’s see why Amazon might seem attractive to her right now.

Everything revolves around artificial intelligence

This isn’t the first time Cathie Wood has bought Amazon stock. She’s held it for years in several of her exchange-traded funds (ETFs). Her recent picks are typically risky and highly disruptive, but Amazon caught her attention last week.

Under the leadership of founder Jess Bezos, Amazon developed a mandate it calls “Day 1.” The company still frequently uses this phrase to guide growth and innovation, as if each day is a fresh start. This is evident throughout the company’s culture, and recently AI has been driving the company’s growth opportunities.

Today, e-commerce and cloud storage, Amazon’s core businesses, are so mainstream that they wouldn’t attract Wood’s attention. But AI is a disruptive force that makes Amazon an attractive bet even for Wood.

Current CEO Andy Jassy said the AI ​​business is growing “dramatically” and already has multi-billion dollar revenue. Its position as the largest cloud computing company gives it an unparalleled data set that it is exploring to create the highest standards in AI, and its customers tell it they want more flexibility at a competitive price. Although it is competing with companies like NVIDIA Amazon is also currently developing its own AI chips in which these factors play a role.

This translates into practical services for Amazon Web Services (AWS) customers. Jassy said that in the past 18 months, AWS has made “more than twice as many machine learning and generative AI capabilities generally available as all other major cloud providers combined.” He added that this is far from complete.

Amazon is now significantly cheaper

What smart investors usually get right is timing. I’m not saying you can time the market right, because you can’t. But smart investors wait for opportunities and buy stocks on dips, at bargain prices, and when they’re out of demand. Many investors are afraid to buy stocks like these. Intuitively, it makes sense to buy stocks the market likes. But stocks that are already doing well in the market have almost by definition already made strong gains, and the best stocks are often the counterintuitive buys, as long as you’re OK with some risk.

Cathie Wood isn’t known for her penchant for undervalued stocks like Warren Buffett, but it seems she couldn’t pass up the opportunity to buy Amazon shares when they plummeted after the earnings release. Not only did she buy Amazon shares, but she bought them on all five trading days last week, and she bought them for six of Ark Invest’s eight ETFs.

Amazon stock plunged after its second-quarter report, largely due to two things: a slight miss on revenue expectations and a revenue forecast below the analyst consensus average. Since then, the stock has started to climb again, but is still down 9% since the earnings announcement.

Ark has ended its buying spree, at least for now. Is it too late to buy? Maybe Cathie Wood got Amazon at a bargain price, but it still looks like a bargain. The price is near its lowest valuation in 10 years and well below recent averages.

AMZN P/E data from YCharts

In other words, the opportunity to buy Amazon stock at this valuation is a rare treat. I’ve focused on AI here because that’s probably where Cathie Wood sees that opportunity. But Amazon has plenty of opportunities in e-commerce, advertising, streaming, healthcare, and more, and it’s not too late to buy this standout stock at bargain prices.