Cathie Wood isn't buying the artificial intelligence hype at Nvidia (NVDA).
The founder of Ark Invest, and noted tech innovation investor, tweeted on Monday that the AI darling is now overpriced.
Nvidia shares have risen more than 30% since the company reported earnings on May 24, and the stock touched a $1 trillion dollar market cap on Tuesday.
Wood and Ark sold their holdings in Nvidia back in January. Since Nvidia's stock has more than doubled as investors have dubbed the company the clear leader in the AI chipmaking arms race. In just the past week, Nvidia announced revenue guidance that blew away Wall Street estimates and followed that news up with new AI-focused product launches.
It hasn't just been Nvidia stock soaring, either. On Friday, Marvell Technology (MRVL) said the company expects revenue attributable to AI to double the next year. Shares rose more than 30% on the news amid a broader AI-infused tech rally that's continued into Monday's trading session.
With the Nasdaq Composite (^IXIC) now up more than 2.5% in the last five days, Wood argues there are going to be other winners in the AI space outside of Nvidia.
"Other companies with visionary leaders, strong global distribution and, perhaps most important, large-high-quality pools of proprietary data should be big #AI winners, with revenues and earnings surprising significantly on the high side of expectations during the years ahead," Wood tweeted.
There will be "dozens" of AI winners, according to Wood. But the one that stands out to Ark, as it often does, is Tesla (TSLA).
Wood argues that at six times revenue, Tesla stock is far cheaper than Nvidia's current 25 times revenue valuation.
"(Tesla) is the most obvious beneficiary of the recent breakthroughs in #AI, as it aims for an $8-10 trillion revenue TAM in autonomous mobility by 2030," Wood wrote.
With several positive headlines in the news of late including a growing relationship in China, Tesla shares are up more than 7% amid the broader tech rally.
Wood's Nvidia comments come as her flagship ETF, the Ark Innovation Fund (ARKK), has struggled to return to its pandemic dominance. The ETF skyrocketed during the risk-on bull market of 2020 with high-flying pandemic darlings like Tesla, Zoom (ZM), and even Nvidia contributing to gains.
But as the Federal Reserve enacted its most aggressive interest rate hike campaign in four decades, risky bets became less popular with investors. Some of Ark's top holdings, such as Zoom, Roku (ROKU), and Coinbase (COIN) are well off their pandemic highs.
The fund itself lost more than $1 billion in market cap in 2022 with shares falling nearly 67%.
[link] [comments] https://www.reddit.com/r/stocks/comments/13wi9do/cathie_wood_calls_nvidia_stock_overpriced_after/
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