EXCLUSIVE: Is Nvidia Overvalued? Cathie Wood Says Every Stock Could Become An AI Stock

While artificial intelligence is now becoming a household word for most investors, it’s been on Ark Invest founder Cathie Wood's mind for quite some time. Wood has been trading in and out of Nvidia Corp NVDA since at least 2016, and she says the AI trade remains a good one — and it’s going to extend to most companies sooner than we may think.

What Happened: “Is it too late to invest in AI stocks?” Benzinga CEO Jason Raznick asks Wood in an exclusive interview that will air on "The Raz Report" at 2 p.m. ET Wednesday, Aug. 30.

“No,” Wood said. Any company with “proprietary data, domain expertise in their own business, as well as AI expertise” can leverage AI to become more competitive, she said, naming Twilio Inc TWLO as an example.

The cloud communications platform has more than 1 trillion engagements between consumers and businesses every year, and the figure is growing, Wood said.

Nvidia trades at about 25 times this year’s revenue, whereas Twilio trades at a much lower 2.5 times. She highlights Twilio’s relatively low valuation as an investment opportunity, noting the company is moving into cash flow profitability and has promising margins that will likely rise as it incorporates more AI into its business.

Interested in the future of artificial intelligence and its potential to transform industries? The leading experts and asset managers will reveal their next big bets in the digital asset ecosystem at Benzinga's 2023 Future of Digital Assets. Don’t miss out.

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The Case For UiPath: Wood also touched on UiPath Inc PATH, a company specializing in robotic process automation. UiPath has great potential in its ability to optimize business workflows with its AI, and could cut global knowledge worker expenses by as much as 50%, she said.

The Ark Invest founder said technology is a net job creator, and while different sectors may see layoffs with the initial integration of AI, there will be "other new jobs created that we cannot even imagine now."

Why It’s Important: AI tech is being integrated into multiple industries, from financial institutions like Moody's Corp MCO and Discover Financial Services DFS to companies like Twilio and UIPath. The increasingly dynamic landscape implies that investors might need to rethink traditional valuation models and consider the transformative potential of AI.

Wood’s message is clear: It’s not just about investing in AI stocks, but also about recognizing how AI can transform the value proposition of existing companies.

Interested in the future of artificial intelligence and its potential to transform industries? Join Benzinga's 2023 Future of Digital Assets to hear from industry experts.

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Cathie Wood photo courtesy of Ark Invest.