Cathie Wood’s ARK Innovation ETF was rising sharply Tuesday, as shares of its largest holding Tesla Inc. jumped and technology stocks rallied amid ongoing investor enthusiasm over artificial intelligence.
The ARK Innovation ETF
ARKK,
an exchange-traded fund that targets disruptive innovation as an investment theme, was up 1.6% Tuesday afternoon, outpacing the tech-heavy Nasdaq Composite index’s
COMP,
0.5% rise, according to FactSet data, at last check.
But the ETF no longer holds chip maker Nvidia Corp., even as ARK Investment Management founder Wood expects the company will power the era of artificial intelligence. While her firm has believed since 2014 that “Nvidia saw the AI future before most other chip companies” and expects it will continue “to power the AI age,” the company now looks expensive, Wood suggested over Twitter on Monday.
“At 25X expected revenue for this year,” Nvidia’s stock is “priced ahead of the curve,” she said in a thread of tweets. Tesla, which trades at 6x revenues, is “the most obvious beneficiary of the recent breakthroughs” in AI, she tweeted.
Shares of Nvidia
NVDA,
have skyrocketed this year, with their almost 4% gain on Tuesday afternoon bringing the stock’s surge so far this year to nearly 177%, according to FactSet data, at last check. Electric car maker Tesla
TSLA,
was up more than 3% in Tuesday afternoon trading, increasing its year–to-date climb to around 62%.
“Companies with visionary leaders, strong global distribution and, perhaps most important, large high-quality pools of proprietary data should be big #AI winners, with revenues and earnings surprising significantly on the high side of expectations during the years ahead,” Wood said in her thread of tweets.
Read: AI buzz pushes tech stocks higher – but here’s why the ripple effect in stocks may still be ‘narrow’
“Investors seem to think NVDA is the only AI play. It is not!” Wood wrote over Twitter on Monday, referencing Nvidia’s ticker and surging stock price.
Meanwhile, the Roundhill Generative AI & Technology ETF
CHAT,
which launched earlier this month, was up 2% Tuesday afternoon. The fund, whose top holdings include Nvidia, was trading with modestly larger gains than the ARK Innovation ETF.
So far this year, Wood’s flagship ARK Innovation ETF has surged around 27%, according to FactSet data based on Tuesday afternoon trading. That compares with a more than 24% rise for the Nasdaq this year on Tuesday afternoon, FactSet data show, at last check.
Beyond Tesla, other top holdings of the ARK Innovation ETF on Tuesday included Zoom Video Communications Inc.
ZM,
Roku Inc.
ROKU,
Coinbase Global Inc.
COIN,
and enterprise automation software business Uipath Inc.
PATH,
according to data on ARK’s website.
Tesla should benefit from AI as it aims for an $8 trillion-to-$10 trillion-revenue total addressable market for “autonomous mobility” by 2030, Wood wrote in a tweet Monday. “But, based on our research for the last five to six years, @ARKInvest sees dozens of AI winners!”
