(Bloomberg) — Kathy Wood said software providers will be next to jump on the artificial intelligence frenzy driven by Nvidia.
Bloomberg’s most read articles
Ark Investment Management LLC founder and CEO Wood told Bloomberg TV on Wednesday, “We’re actually going to be a software provider right now where we were when we first acquired NVIDIA. We’re keeping an eye on it,” he told Bloomberg TV. Nvidia is expected to do better over time, but Ark is “working on what’s next,” she added.
Wood’s flagship ARK Innovation ETF (ticker ARKK) slashed its stake in Nvidia in January, missing out on a spectacular surge in the chipmaker’s market valuation that briefly topped $1 trillion. Wood tweeted earlier this week, citing concerns about the boom-bust cycle in the computer chip industry, calling NVIDIA stock “pricing ahead of its time” and dismissing his decision to sell NVIDIA shares. defended.
READ: Too Rich For Kathy Wood, NVIDIA Stock Exceeds Valuation Threshold
Instead, Wood is betting on software stocks that he expects to eventually grow to the size of Nvidia, citing UiPath Inc., Twilio Inc., and Teladoc Health Inc. as prime examples. Wood’s fund owns all three stocks.
“For every dollar of hardware Nvidia sells, software providers, SaaS providers, will generate $8 in revenue,” Wood told Bloomberg TV.
Mr. Wood is betting on three companies that have fallen sharply from their highs. New York-based UiPath soared to more than $85 a share after going public in 2021, but has since fallen about 80%. San Francisco-based Twilio is down 85% from its 2021 peak, while Teladoc Health is down more than 90% from its 2021 high.
The Ark Innovation ETF is down more than 10% from its peak in early February, while the Nasdaq 100 stock index is up 12% over the period.
Wood reiterates that Tesla is “the biggest business in artificial intelligence,” and expects the company’s stock to hit $2,000 by 2027, from around $200 today, thanks to self-driving technology.
“We believe the self-driving taxi platform will generate $10 trillion in revenue globally from near zero by 2038,” she told Bloomberg TV. “A lot of people think of Tesla as a car stock. We don’t, but we think it’s more than that.”
On China, Wood said the country’s “co-prosperity” policy agenda means companies entering the country must give up margins if they want the opportunity to scale.
–With help from Sherry Ann, Rebecca Shin, Edwin Chan and Peter Elstrom.
(further update on Wood’s choice of software from 6th paragraph)
Bloomberg Businessweek’s Most Read Articles
©2023 Bloomberg LP