Here's How Much Cathie Wood, Ark Invest Flagship Fund Missed By Selling Nvidia Early

Ark Invest CEO Cathie Wood has been praised for her recognition of innovation markets and growth sectors such as artificial intelligence. Wood saw a potential growth industry in AI for NVIDIA Corp NVDA earlier than many.

The bad news for Wood and investors in the flagship Ark Innovation ETF ARKK is the popular ETF sold out of its position too early and missed the current huge increase in price for Nvidia shares.

What Happened: Over the years, Wood has been known to hold stocks and call for five-to-10-year outlooks instead of short-term trading. Artificial intelligence has been a big idea from the fund management company in recent years.

The Ark Innovation ETF invested in Nvidia on several occasions before selling out of its position completely in January 2023 after selling a large portion beginning in November 2022.

Today, those original shares would be worth significantly more than when sold.

Wood recalled investing in Nvidia early during an interview on Benzinga's "The Raz Report." Wood said Ark Invest was "there" when Nvidia was in the early growth stages and mentioned a brainstorming session that led to buying shares in 2014 back at a price point of around $5.

Selling winners isn't new for Wood and she shared that sometimes it's smart to take profits.

"If we see one of our stocks up 20, 30, 50, 100, 200% in a short period of time, we will take profits," Wood said.

After selling the complete position of Nvidia in the flagship ETF, Wood said the company's valuation was "very high."

"We like Nvidia, we think it's going to be a good stock," Wood told CNBC at the time.

Wood said the flagship fun had consolidated to its highest conviction names at the time, including analyzing valuation of stocks.

In November 2022, the Ark Innovation ETF held 772,884 shares of Nvidia according to data from CathiesArk. The fund sold a sizable chunk of Nvidia shares from this fund and several other Ark ETFs on Nov. 9.

For the purpose of this exercise, let’s use 772,884 shares as a starting point and use a price point of $142.11, which was the intraday high on Nov. 9, 2022.

The shares held on Nov. 9 would have been worth $109,834,545.20 at the time based on these prices. Ark sold all the shares from the flagship fund between November and January.

Today, the same 772,884 shares would be worth $616,676,414.76. This means Ark Invest may have missed out on potential profits of $506.8 million by selling the Nvidia shares early.

Keep in mind this is only the Nvidia shares in the Ark Innovation ETF and also doesn't account for shares of Nvidia that were previously bought in 2014 and previously sold.

What's Next: A firm believer in the growth of artificial intelligence, Wood has said that other companies could have more upside than Nvidia over the next five years. Tesla Inc TSLA is the biggest AI stock winner, according to Wood in multiple interviews.

"Substantially more (upside) than Nvidia's," Wood said of Tesla.

Wood has also singled out UiPath Inc VPATH and Twilio Inc TWLO as potential long-term AI winners.

While Nvidia is no longer a holding in the Ark Innovation ETF flagship fund, the stock is part of several Ark ETFs, with the following holdings and weightings as of Friday:

Ark Next Generation Internet ETF ARKW: 21,199 shares, $16.6 million, 1.03% weighting, 29^th largest holding

Ark Genomic Revolution ETF ARKG: 23,502 shares, $18.5 million, 1.01% weighting, 31^st largest holding

Ark Fintech Innovation ETF ARKF: 16,713 shares, $13.1 million, 1.23% weighting, 24^th largest holding

Ark Autonomous Technology & Robotics ETF ARKQ: 32,073 shares, $25.2 million, 2.71% weighting, 11^th largest holding