Cathie Wood made a wild prediction almost two years ago: Annual economic growth could accelerate to as much as 50%, thanks to breakthroughs in the world of artificial intelligence.
Yet as the AI frenzy intensifies across Wall Street thanks to Nvidia Corp.’s stellar earnings report, Wood’s flagship ARK Innovation ETF (NYSEARCA: ARKK) is missing out in epic fashion — down nearly 8% so far this year.
Despite Wood’s professed faith in the disruptive technologies of tomorrow, the main strategy at ARK Investment Management hasn’t held shares of its biggest winner, Nvidia, since early 2023, according to data compiled by Bloomberg. Meanwhile, its smaller ETFs have recently trimmed their already modest holdings in the Jensen Huang-led firm that’s just added $256 billion in market value in Thursday trading alone.
The world’s third-most valuable stock extended its 2024 gain to 57% after its sales forecasts beat estimates. The S&P 500 and Nasdaq 100 are each up about 6% this year, respectively.
In the telling of Wood’s firm, it’s all by design. ARK expects the AI-fueled market gains to broaden, and prefers to have exposure outside the main indexes, researchers wrote on its website in August. The asset manager also judged stocks like Nvidia as over-priced.
Read the full article here by Justina Lee of Bloomberg News, Advisor Perspectives
