Cathie Wood Explains Why She Sold Nvidia 'At The Bottom,' But More Importantly Tells Why She Purchased The Shares In The First Place

Cathie Wood, founder of ARK Invest, has responded to criticism regarding ARK’s sale of Nvidia shares, highlighting the fund’s early investment and subsequent profits.

What Happened: In a Monday tweet, Wood addressed a post questioning why ARK sold Nvidia Corporation. NVDA shares amidst a significant rally. “Based on our #AI research,” Wood tweeted, “ARKInvest bought $NVDA in 2014 at ~$5 when most investors were valuing it as a PC gaming chip company. After more than a 150-fold gain, we continue to take profits.”

See Also: What’s Going On With AMD’s Stock Today

Wood’s tweet comes after ARK Invest sold nearly $4 million worth of Nvidia shares, despite a post-earnings rally that saw the stock soar over 16% in regular trading.

NVDA shares have shot up nearly 236.5% over 12 months and since the year began they are up almost 60%. In comparison, Ark’s flagship fund, ARK Innovation ETF ARKK, has given significantly lower returns.

A hypothetical $1,000 investment in NVDA shares on Feb 26, 2023, would have transformed into $3,353.72 as of today. A similar investment in ARKK would have netted only $1,247.04.

How would a $1,000 investment fare if an investor chose to invest in NVDA and ARKK one year ago

Why It Matters: ARK’s decision to offload Nvidia stock drew criticism as the company, primarily known for AI and gaming chips, continued to ride a wave of success. Nvidia’s value surged, adding $273 billion in a single day after beating expected revenue and earnings per share in its latest earnings call.

Despite Wood’s belief in disruptive technologies and ARK’s early backing of Nvidia, the flagship ARK Innovation ETF has not held Nvidia shares since early 2023. This decision resulted in ARKK missing out on Nvidia’s stellar performance, with the fund down nearly 8% this year.

Price Action: On Monday, Nvidia shares closed 0.35% higher at $790.92 in the regular session and declined 0.2% in the after-hours trading.

Photo via Ark Invest.

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