Cathie Wood’s Ark Invest Has Strong AI Exposure Despite Trimming Nvidia

As per the latest report, Cathie Woods’ Ark Investment still has sizeable exposure to the Artificial Intelligence (AI) industry even after the company trimmed its sizeable holdings in Nvidia (NASDAQ: NVDA) last year, before the massive rally.

No Regret on Missing Out on Nvidia Rally

The Nvidia stock price has witnessed a mega surge over the last year amid the semiconductor and AI boom. The chipmaker driving the AI revolution has witnessed a further 15% increase in its share price since May 24th, fueled by first-quarter sales surpassing analyst expectations and a second-quarter forecast exceeding projections. Since late 2022, its share price has surged more than eightfold to approximately $1,224, propelling its market value to $3 trillion, surpassing even that of Apple Inc.

Ark Invest sold most of its stock position in Nvidia before the rally started last year. However, Cathie Wood holds no regrets for missing out on the rally. During a video interview at the Greenwich Economic Forum in Hong Kong on Thursday, Wood mentioned that her private fund has significant exposure to emerging companies. She also noted that her firm retains ownership of Nvidia in both specialized portfolios and the flagship fund.

Ark Invest had made its first purchase of Nvidia back in 2014 when the stock price traded at $4 after the stock split. Interestingly, the ARK Innovation ETF was holding the stock till the time it touched the high of $400.

“We were saying to ourselves if Nvidia is going to keep running like this, the only reason it should deserve to do that is if it’s going to benefit a lot of other companies, and we began to look at what those other companies might be,” said Wood. “We did pull away and I suppose it was a bit of a statement.”

Ark Invest Still Betting on Semiconductor Play

Cathie Wood believes the semiconductor sector’s potential remains untapped, emphasizing a temporary pause as companies reassess their strategic approaches to AI. Despite some companies failing to capitalize on the anticipated revenue boost from AI this earnings season, such as Salesforce Inc., Wood remains confident in the long-term trajectory. She defends her investment in Tesla Inc., asserting that autonomous driving represents the most significant AI endeavor globally.

Ark bolstered its position in Tesla during the first quarter, even amidst concerns about a slowdown in electric vehicle consumption and competition from Chinese rival BYD Co. Wood contends that Tesla is poised to increase its market share, especially as competitors like General Motors Co. and Ford Motor Co. scale back EV plans due to profitability worries.

In a 2023 analysis, Ark projected Tesla’s shares to reach $2,000 by 2027, with bullish and bearish scenarios at $2,500 and $1,400 per share, respectively.

In late May, the Ark Venture Fund disclosed a stake in Elon Musk’s AI startup xAI, constituting approximately 2% of its holdings. This move followed a month after Ark revealed a position in OpenAI, comprising about 4% of its portfolio.