“We are looking to the software providers who are actually right now where Nvidia was when we first bought it,” Wood sais. — Bloomberg
NEW YORK: Cathie Wood says software providers will be the next to ride on the artificial intelligence frenzy driven by Nvidia Corp.
“We are looking to the software providers who are actually right now where Nvidia was when we first bought it,” Wood, chief executive officer and founder of Ark Investment Management LLC, told Bloomberg TV.
While Nvidia is expected to do well over time, Ark is “onto the next thing”, she added.
Wood’s flagship ARK Innovation ETF cut its holding in Nvidia in January and has missed out on an epic rally that made the chipmaker briefly cross US$1 trillion (RM4.6 trillion) in market valuation.
Wood has defended her decision to dump Nvidia stocks, citing concerns over the computer chip industry’s boom-bust cycle and said it was “priced ahead of the curve” in a tweet earlier this week.
Instead, Wood is betting on software stocks that she expects to eventually grow into the size of Nvidia, citing UiPath Inc, Twilio Inc and Teladoc Health Inc as key examples. Wood’s funds hold all three stocks.
“For every dollar of hardware that Nvidia sells, software providers and SaaS providers will generate US$8 (RM36.94) in revenue,” Wood told Bloomberg TV.
Wood is betting on a trio of companies that have fallen far off their highs.
New York-based UiPath rose to more than US$85 (392.44) a share after going public in 2021 and has tumbled about 80% since.
San Francisco-based Twilio has dropped 85% from its peak in 2021, while Teladoc Health is off more than 90% from its high the same year.
Ark Innovation ETF has lost more than 10% since its peak in early February, while the Nasdaq 100 Stock Index has jumped 12% over the period.
Wood reiterated that Tesla is the “biggest artificial intelligence play” and expected its stock price to reach US$2,000 (RM9,234) in 2027 on autonomous technology from around US$200 (RM923) currently.
“Autonomous taxi platforms, we believe globally, will deliver US$10 trillion (RM46.2 trillion) in revenue from almost zero by 2038,” she said on Bloomberg TV.
“Tesla, many people think, is an auto stock. We don’t. We think it’s much more than that.”
On China, Wood said the “common prosperity” policy agenda there means companies expanding into the country will have to give up on margins if they want that opportunity of scale. — Bloomberg
