During a video interview at the Greenwich Economic Forum in Hong Kong, Cathie Wood‘s Ark Invest stated that the investment management firm continued to be well-placed regarding its artificial intelligence assets. Wood asserted that the firm is well-positioned in AI assets, with diversified exposure to emerging AI companies and retaining Nvidia shares in specialized portfolios and the flagship fund.
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Additionally, Wood called autonomous driving the “biggest AI project on earth,” defending her bet on Tesla (NASDAQ:TSLA). Ark increased its Tesla stake in Q1 despite falling sales and competition from its Chinese rival BYD (OTC:BYDDY). Wood believes Tesla will gain market share as its competitors like GM (NYSE:GM) and Ford (NYSE:F) retreat from EV plans due to profitability concerns.
Wood Skeptical of Nvidia’s High Valuation
Since late 2022, Nvidia’s share price has ballooned more than eightfold to over $1,100, with a market cap of $2.9 trillion. Over the past year, NVDA stock has rallied by more than 200%, fueled by its robust Q1 results and the rise in demand for its AI chips.
Despite Wood’s bullish stance on emerging AI companies, she is not blinded by unrealistic expectations. Wood had said earlier that she remains unconvinced by Nvidia’s high valuation and noted, “It’s a very cyclical stock.” Moreover, Wood warned that over-ordering of Nvidia’s GPUs could lead to an inventory correction.
Wood bought Nvidia (NASDAQ:NVDA) at $4 in 2014 and held it in the ARK Innovation ETF (NYSEARCA:ARKK) until it reached around $400. Wood sold most of the Nvidia shares before the company’s stock rallied last year. This demonstrates that Wood strategically assesses market conditions and does not hesitate to adjust her positions based on realistic valuations and potential risks.
Is ARKK a Good ETF?
Analysts remain cautiously optimistic about ARKK, with a Moderate Buy consensus rating based on 27 Buys, eight Holds, and one Sell. Year-to-date, ARKK has declined by more than 10%, and the average ARKK price target of $55.43 implies an upside potential of 23.8% from current levels.
