Cathie Woods Ark Invest Has Strong AI Exposure Despite Trimming Nvidia

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As a seasoned crypto investor with a background in tech and AI, I’ve been following Cathie Wood and Ark Invest closely for years. While missing out on Nvidia’s massive rally last year may have stung initially, I fully understand and support Wood’s strategic decision to pivot towards emerging companies in the sector.

According to recent data, Cathie Wood’s Ark Investment maintains a significant stake in the Artificial Intelligence (AI) sector despite selling a large portion of its Nvidia (NVDA) shares prior to their substantial price increase last year.

No Regret on Missing Out on Nvidia Rally

As a crypto investor, I’ve seen the Nvidia stock price soar over the past year due to the semiconductor and AI boom. The company leading the charge in this space has experienced an additional 15% jump in share price since May 24th. This was driven by first-quarter sales beating analyst estimates, as well as a second-quarter forecast that exceeded projections. Since late 2022, Nvidia’s stock price has skyrocketed more than eightfold, reaching around $1,224. With this surge, the company’s market value has hit an impressive $3 trillion, making it even more valuable than Apple Inc.

Ark Invest sold the majority of its Nvidia stock holdings prior to last year’s rally. Yet, Cathie Wood expresses no remorse for missing out on the price surge. In a recent interview at the Greenwich Economic Forum in Hong Kong, she revealed that her personal fund is heavily invested in up-and-coming businesses. Moreover, she confirmed that Ark Invest continues to own Nvidia shares in specific portfolios and its main fund.

Back in 2014, Ark Invest made its initial investment in Nvidia when the stock was priced around $4 following a split. Remarkably, the ARK Innovation ETF continued to hold onto this stock until its price soared to an astounding high of $400.

As an analyst, I pondered over Nvidia’s continuous succession of impressive financial reports. I questioned if this trend would persist without significant contributions to other businesses. Intrigued, I delved deeper to identify potential beneficiaries.

Ark Invest Still Betting on Semiconductor Play

Cathie Wood is convinced that the semiconductor sector holds great untapped potential, acknowledging a brief hiatus as businesses reevaluate their strategies regarding artificial intelligence (AI). Although some companies like Salesforce Inc. didn’t meet revenue expectations from AI during this earnings period, Wood remains optimistic about the future. She stands firm in her belief in Tesla Inc., explaining that autonomous driving represents the most substantial global AI initiative.

During the initial quarter, Ark strengthened its foothold in Tesla’s market, defying concerns over decreased demand for electric vehicles (EVs) and intensifying competition from Chinese automaker BYD Co. Wood argues that Tesla is primed to expand its market dominance, given that competitors such as General Motors Co. and Ford Motor Co. are reconsidering their EV strategies due to financial concerns.

According to a forecast published in 2023 by Ark, Tesla’s stock price could hit $2,000 by the end of 2027. However, there are varying opinions on this matter. The optimistic outlook predicts a price of $2,500 per share, while the more conservative view suggests a price of $1,400 per share.

As a crypto investor following the latest developments in the tech world, I’m excited to share that in late May, I made an investment in Elon Musk’s AI startup xAI through the Ark Venture Fund. This new position represents around 2% of my current holdings. Prior to this, I had already allocated about 4% of my portfolio to OpenAI after the fund disclosed its position there in April. These moves reflect my belief in the potential growth and impact of AI technologies on the global market.

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2024-06-06 12:56