Cathie Wood's Ark Invest Bumps Up Stake In This Chipmaker After Selling $10M Worth Of Nvidia Last Week

Cathie Wood’s Ark Invest on Monday picked up shares of Advanced Micro Devices, Inc. NVDA even as the firm has been divesting its stake in rival chipmaker Nvidia Corp. NVDA.

What Happened: Ark, through its Ark Autonomous Technology and Robotics ETF ARKQ, bought 14,978 shares of AMD. The purchase is valued at $1.58 million based on AMD’s closing price of $105.32 on Monday.

With the purchase, AMD now accounts for 0.60% weighting of the ARKQ by virtue of the 61,486 shares the exchange-traded fund holds.

Rival chipmaker Nvidia has a 2.74% weighting in ARKQ and the ETF holds 65,024 shares of the chipmaker.

Last week Ark’s Ark Genomic Revolution ETF ARKG sold 21,014 Nvidia shares worth $9.79 million. ARKG now holds about 110,478 shares, with a 2.54% portfolio weighting.

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Why It’s Important: Ark has been on a Nvidia selling spree since October 2022 and the firm’s flagship Ark Innovation ETF ARKK has completely cashed out of Nvidia by January this year. This is despite the stock outperforming large-cap tech peers, thanks to strong momentum in artificial intelligence technology.

Nvidia is the best-performing S&P 500 stock this year, having gained 209% year-to-date. Ark’s Nvidia divestment is premised on the company’s staggering valuation, thanks to the strong stock runup, and the relative attractiveness of other smaller AI plays, which are in the early innings of their uptrend.

AMD, though lagging behind Nvidia, in terms of stock performance has a huge window of AI opportunity like Nvidia. The company is on track to ramp up production of its flagship M1300 AI chips in the fourth quarter. This accelerator chip will go up against Nvidia’s own H100 AI chip that now powers most of the AI software and applications.

Nvidia ended Monday’s session down 0.86% at $451.78 and AMD fell 0.73% to $105.32, according to Benzinga Pro data.

Related Link: Is NVIDIA Overpriced? Cathie Wood’s Ark Invest Highlights 3 Other AI Stocks