One of the most notable exchange-traded fund families may have sold shares of Nvidia Corporation NVDA early. The Ark Funds ETFs have continued selling Nvidia shares since the company reported first-quarter financial results.
Here’s a look at the current stakes held by Ark Funds.
What Happened: Semiconductor and technology giant Nvidia Corporation briefly joined the $1 trillion market capitalization club this week with shares rising after the first quarter earnings report last week.
Nvidia highlighted the strength of its data center business and the demand for its AI chips. Analysts raised their price targets on the stock with second-quarter guidance of $11 billion, coming in significantly higher than a Street consensus estimate of $7.15 billion.
While Nvidia shares may go higher in the near term or long term, some investors are taking profits with shares up over 175% in 2023.
Among those taking profits is Cathie Wood, CEO of Ark Funds.
Benzinga previously reported on Ark Funds selling shares of Nvidia after the earnings report. The ETF company previously sold 65,600 shares of Nvidia worth around $24 million last week.
On Wednesday, Ark shed another 23,290 shares of Nvidia from a position held by the Ark Autonomous Technology & Robotics ETF ARKQ. The sale represented around $8.8 million and was around 1% of assets in the ETF.
With the proceeds from the sale, the Ark ETF added to its positions in Teradyne Inc TER and UIPATH Inc PATH, which are currently the sixth and second largest positions in the ETF respectively.
Here are the current positions held in Nvidia shares by Ark Funds:
Ark Autonomous Technology: 81,106 shares, $30.7 million, 3.3% of assets, 10th largest position
Ark Genomic Revolution ETF ARKG: 138,284 shares, $52.3 million, 2.60% of assets, 15th largest position
Ark Next Generation Internet ETF ARKW: 48,690 shares, $18.4 million, 1.46% of assets, 21st largest position
Ark Fintech Innovation ETF ARKF: 32,432 shares, $12.3 million, 1.42% of assets, 21st largest position
Related Link: Nancy Pelosi Sold Nvidia Early, Here's How Much She Missed In Profits
Why It’s Important: Artificial intelligence is one of the “Big Ideas” in the 2023 Ark Funds report. The topic has been frequently mentioned by Wood.
With Nvidia now seen as one of the biggest beneficiaries in a rise of use cases and demand for artificial intelligence products, it is possible that Ark Funds was right about its early thesis about Nvidia, but sold too early.
The flagship Ark Innovation ETF ARKK sold its stake in Nvidia in January. At the time, Wood said the valuation of Nvidia was “very high.”
“We like Nvidia, we think it’s going to be a good stock. It’s priced — it’s the ‘check-the-box’ AI company,” Wood told CNBC at the time. “For a flagship fund, where we’ve consolidated towards our highest conviction names, part of that has to do with valuation.”
The stock was sold from the flagship fund, with shares at around $234 each, significantly lower than the $391.88 at the time of writing and the 52-week high of $419.38 set recently.
When the Ark Innovation ETF launched in 2024, Nvidia was among the top holdings. A report said that gains from Nvidia over the years have contributed a significant amount to the overall gains seen by Ark Innovation.
Outside of Nvida, Ark Funds has accumulated more shares of Palantir Technologies PLTR as an AI play and is betting on what it thinks is the best AI play out there.
“We think that Tesla is the biggest AI play out there, the biggest beneficiary.”
Tesla Inc TSLA is one of the largest holdings across the Ark Funds ETFs. Wood has highlighted for years the role that AI is playing for the electric vehicle company and the impact full-self-driving vehicles could have on the company’s financials.
While the Ark Funds ETFs are up year-to-date in 2023 thanks to companies like Tesla and other technology companies rebounding from 2022 declines, the funds trail the performance of Nvidia. The Ark Funds also trail other AI-themed ETFs.
Wood isn’t the only one selling shares of Nvidia after new highs were reached. Board member Tench Coxe, who is the third largest individual shareholder of the company, recently sold shares that he bought back in 1997.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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