Missed The Boat? Cathie Wood's ARKK Completely Lost Out On Nvidia's Monster Run.

Up And Up

Nvidia NVDA made history Thursday, adding $273 billion in value in a single day. That is the most ever recorded. The AI chipmaker is now the 4th largest company in the world, sitting just behind Saudi Aramco (TADAWUL: 2222) and just ahead of Amazon AMZN and Alphabet GOOG.

Thursday's bump came after the most recent earnings call; the company once again beat expected revenue and earnings per share. The numbers it is forecasting for the next quarter are also higher than many analysts expected.

Since the AI craze began in early 2023, Nvidia’s stock has risen well over 350%. The company is a primary piece in manufacturing the chips that power AI servers and has enjoyed the mantle of the go-to AI stock.

Cathie’s View

Why then does Cathie Wood hold no NVIDIA in the ARK Innovation ETF ARKK? Well, she did. Then, in January of 2023, at the inflection point of NVIDIA’s meteoric rise, she sold the last of her shares.

Essentially, Wood believes NVIDIA to be overvalued and prefers, as is part of her philosophy, to invest in smaller AI stocks with what she sees as having more to grow. Wood has described Nvidia as “easy,” “really expensive” and “very obvious”.

After the sale, Wood said, “We’re just pivoting to another set of plays that most people have not discovered yet. Much like they did not understand that Nvidia was an AI play, really, until very recently.”

Wood prefers companies like UiPath Inc. PATH and Twilio Inc. TWLO. 

Max View 

Traders bullish on Wood and her fund can buy the ETF directly or for those who want to further maximize their view, leveraged funds can help. For example, the award-winning AXS 2X Innovation ETF TARK aims to return twice the daily return of ARKK. 

And for traders not buying what Wood is selling, AXS offers an option for the bears. The AXS Short Innovation Daily ETF SARK, which aims to return the inverse performance of ARKK, can be an attractive option.

TARK was just awarded Best ETF Launch at Benzinga’s 2023 Fintech Awards. The innovative fund was launched in May of 2022 and the care and skill with which the fund is operated is clear.

Photo by Matteo Miliddi on Unsplash