Ark Invest, led by Cathie Wood, retains significant AI industry exposure despite reducing Nvidia holdings before last year’s rally.
Cathie Woods’ Ark Investment maintains substantial exposure to the Artificial Intelligence (AI) sector, according to the most recent report. This is even though the company reduced its substantial stake in Nvidia (NASDAQ: NVDA) last year, before the significant uptick.
During the semiconductor and AI growth of the past year, the stock price of Nvidia has experienced a significant increase. The chipmaker that is spearheading the AI revolution has experienced an additional 15% increase in its share price since May 24th.
This increase was driven by first-quarter sales that surpassed analyst expectations and a second-quarter forecast that surpassed projections. Its market value has increased to $3 trillion, surpassing that of Apple Inc., as its share price has increased by over eightfold to approximately $1,224 since late 2022.
Most of Ark Invest’s stock position in Nvidia was disposed of before the commencement of the rally last year. Nevertheless, Cathie Wood has no remorse for not attending the rally.
Wood disclosed that her private fund has substantial exposure to emerging companies during a video interview at the Greenwich Economic Forum in Hong Kong on Thursday. Additionally, she observed that her organization maintains ownership of Nvidia in the premier fund and specialized portfolios.
In 2014, Ark Invest acquired its initial stake in Nvidia for $4 following the stock split. The ARK Innovation ETF was holding the stock until it reached a peak of $400, which is an intriguing development.
Wood stated, “We were contemplating the possibility that Nvidia’s continued operations would be justified only if they would be advantageous to numerous other organizations. Consequently, we began to investigate the possibility of these other organizations.” “We did withdraw, and I suppose it was somewhat of a declaration.”
Cathie Wood is of the opinion that the semiconductor sector’s potential is still underutilized, and she emphasizes that a temporary pause is necessary as companies reassess their strategic approaches to AI.
Wood remains optimistic about the long-term trajectory, despite the fact that some companies, including Salesforce Inc., have not capitalized on the anticipated revenue increase from AI this earnings season. She maintains that autonomous driving is the most significant AI endeavor on a global scale, which is why she defends her investment in Tesla Inc.
Despite concerns regarding a decline in the consumption of electric vehicles and competition from Chinese rival BYD Co., Ark strengthened its position in Tesla during the first quarter. Wood argues that Tesla is on the brink of expanding its market share, particularly as competitors such as General Motors Co. and Ford Motor Co. reduce their electric vehicle initiatives as a result of profitability concerns.
According to Ark’s 2023 analysis, Tesla’s shares are expected to reach $2,000 by 2027, with bullish and adverse scenarios at $2,500 and $1,400 per share, respectively.
The Ark Venture Fund disclosed a stake in Elon Musk’s AI startup xAI in late May, which accounts for approximately 2% of its holdings. A month after Ark disclosed a position in OpenAI, which accounts for approximately 4% of its portfolio, this action was taken.