Cathie Wood’s Top Fund Missed Nvidia’s Stock Surge. But ARK Made This AI Bet.

Cathie Wood said in February that while she still liked Nvidia, its valuation was “very high.”

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Cathie Wood’s flagship fund was into Nvidia before the chip maker became the hottest thing on Wall Street. Unfortunately for the head of ARK Investment Management, it was also out of the stock before its recent surge. 

The ARK Innovation (ticker: ARKK) exchange-traded fund exited its position in Nvidia (NVDA) between November last year and January this year. That was before the majority of the rally which has taken the chip maker to a valuation of nearly $1 trillion as investors back it to be the biggest beneficiary of the growth of artificial intelligence. 

Nvidia shares were down 0.1% in premarket trading on Friday after closing up 24% on Thursday.

It’s an example of the difficulty of valuing the AI trend even for the most bullish tech investors. Wood said in February that while she still liked Nvidia, its valuation was “very high” and ARKK was consolidating around its highest conviction ideas. 

Wood’s investment company still holds Nvidia in a number of its smaller exchange-traded funds but is also selling parts of those positions. An emailed trading update on Thursday showed ARK funds had sold a combined 65,632 shares of Nvidia, worth close to $25 million at the day’s closing price. 

However, that doesn’t mean Wood isn’t looking to play the AI trend. ARK funds bought a combined total of nearly five million UiPath (PATH) shares, according to the Thursday update. UiPath is a provider of automation software, which it says will integrate with AI. ARK looked to be buying the dip, as UiPath shares fell 11% on Thursday on disappointing second-quarter guidance.

UiPath shares were up 0.8% in premarket trading on Friday.

Write to Adam Clark at [email protected]

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