Cathie Wood Onto 'Next Thing' In AI After ARK's Nvidia Exit: What's On Her Radar?

Ark Invest founder Cathie Wood clarified her firm's flagship fund Ark Innovation ETF ARKK decision to cash out of Nvidia Corp. NVDA following criticisms that it missed the boat on the stock's massive rally.

What Happened: Ark owned Nvidia since the inception of its funds and some of its funds, including Ark Autonomous Technology and Robotics ETF ARKQ and Ark Next Generation Internet ETF ARKW still own the stock, Wood said in an interview with Bloomberg.

The fund manager also noted that three of Ark's funds in Japan – metaverse fund, mobility-as-a-service fund and global digitization funds also own Nvidia.

As the stock went from $5, when Ark first bought, to $400, the Wood-run firm has taken profits on it, she said. "There’s a lot of good news discounted in this stock and we still think it will do well over time," she added.

See Also: Best Artificial Intelligence Stocks

Alt Recommendations: Wood, meanwhile, touted a new group of stocks that can leverage the foundation laid by Nvidia. Nvidia is a hardware stock, although it has some software, she said.

"The history of hardware and software is, the bigger beneficiary over time is going to be software," the fund manager said. "In our view for every dollar of hardware that Nvidia sells, software providers, ie. SaaS providers will generate $8 in revenue.”

Wood said Ark is now looking at software providers, who were now where Nvidia was when Ark first bought it.

Among the AI opportunities, the Ark founder highlighted were:

• UiPath, Inc. UI in the software space,
• Twilio, Inc. TWLO in the robotics process automation space
• Exact Sciences Corp. EXAS in the genomics space
• Teladoc Health, Inc. TDOC

"We have companies that are because of artificial intelligence, they are going to develop new businesses that we think are going to drive," she said. These companies are in the $10 billion to $12 billion market cap range, she added.

"We’re on to the next thing," Wood said.

Nvidia traded down 1.55% to $394.90 in premarket trading on Wednesday, according to Benzinga Pro data.

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