Head of Ark Investment Management, Cathie Wood, expressed confidence in her firm’s AI investments despite reducing their Nvidia Corp. holdings before its significant rally last year. In a video interview at the Greenwich Economic Forum in Hong Kong, Wood highlighted Ark’s substantial investment in emerging AI companies.
While Ark still holds Nvidia shares in specialized portfolios and its flagship fund, Wood noted the company first invested in Nvidia in 2014 when shares were about $4, holding until they reached approximately $400.
Although most of Ark’s Nvidia position was sold before last year’s surge, the chipmaker, central to the AI boom, has seen a 15% increase in share price since May 24, following strong first-quarter sales and a promising second-quarter forecast.
Nvidia’s share price has soared over eightfold since late 2022, reaching about $1,224, with its market value surpassing Apple Inc. at $3 trillion. Wood explained the decision to sell, emphasizing the potential benefits to other companies from Nvidia’s rise.
Wood believes the semiconductor sector isn’t done growing but sees a temporary pause as companies strategize around AI. She mentioned that some companies, like Salesforce Inc., which Ark anticipated would benefit from AI, did not meet revenue expectations this earnings season.
Wood defended Ark’s investment in Tesla, calling autonomous driving the “biggest AI project on earth.” Despite concerns about EV market slowdowns and competition from Chinese rival BYD Co., Ark increased its Tesla holdings in the first quarter.
Wood remains optimistic, predicting Tesla will capture more market share as competitors like General Motors Co. and Ford Motor Co. retreat from EV plans due to profitability concerns. Ark’s analysis projects Tesla’s stock could reach $2,000 per share by 2027.
Additionally, Ark Venture Fund recently disclosed stakes in Elon Musk’s AI startups xAI, OpenAI, and Anthropic. Wood, who gained prominence during the pandemic for bold tech predictions, acknowledged that her ARK Innovation ETF, down nearly 16% this year, was bolstered by a 68% gain last year amidst shifting interest rate expectations. She anticipates significant rate cuts in the U.S. this year, driven by economic factors and the upcoming election.
