NVIDIA's stock price reached a new high, and Sister Wood was once again questioned about selling NVIDIA.
Recently, Cathie Wood, the American Ark Fund Wood Sister, once again defended herself for selling Nvidia in an interview with the US media. She said that the liquidation of Nvidia in January this year was based entirely on valuation judgments. Sister Wood admits that NVIDIA's performance in the field of AI is incredible, but the AI company with heavy positions in the Ark Fund has a promising future.
It is worth noting that even if the wooden sister sells Flying NVIDIA, the flagship fund of the Ark Fund ARKK rose by more than 58% during the year. However, after two years of continuous decline, ARKK's vitality has been greatly damaged, and its latest price is still nearly seventy percent lower than its peak, which means that the current net value of the fund can only rise by 223%, and investors who enter the market at the highest level are expected to return their capital.
Sell flying NVIDIA
The head of the Ark Fund, Sister Mu, is known for investing in companies with disruptive innovative technologies. As the hottest AI (artificial intelligence) investment at the moment, she is naturally not absent, and the performance of many products under her management has benefited greatly from the rebound of technology stocks, such as the ARK Innovation ETF (ARKK), the flagship product of Ark Fund, which has risen 58% this year.
Unfortunately, ARKK cleared its position in Nvidia in January this year, thus missing out on NVIDIA's skyrocketing, which puzzled investors. Even though ARKK is up 58% during the year, its latest net worth is still down nearly 70% from the fund's 2021 high. If Sister Mu hadn't reduced her holdings of NVIDIA too early, ARKK might have had a better performance.
NVIDIA is the most representative stock in the field of artificial intelligence at present, the company's stock price has soared 211% so far this year, the market value is as high as $1.12 trillion, and the US stock market value ranks fifth after Apple, Microsoft, Google and Amazon.
Sister Mu has said that its Ark Fund has been studying AI since 2014, and NVIDIA is also one of its related companies. According to the data, in October 2022, ARKK held 750,000 shares of NVIDIA.
NVIDIA's share price has rebounded since October 2022, and with the rebound of NVIDIA's share price, ARKK has been reducing its holdings all the way, and its position in November last year has been reduced to about 39,000 shares, and NVIDIA has disappeared from ARKK's holdings in January 2023.
The reason given by Wood Sister is that its market value has reached 25 times its revenue, and selling Nvidia is purely based on valuation judgment, saying that Nvidia's valuation is too high, and the boom and bust cycle of the computer chip industry also brings risks.
However, catalyzed by ChatGPT, NVIDIA's performance has improved significantly, and NVIDIA's stock price has risen all the way this year, constantly refreshing historical records, rising as high as 211.22% during the year, and the market value has also exceeded trillion dollars.
At present, Sister Wood has undoubtedly completely missed the soaring stock price of NVIDIA. Therefore, the wooden sister, who has always advertised as focusing on investing in cutting-edge scientific and technological innovation, always can't avoid the topic of missing the NVIDIA market when interviewed by the media.
Bullish on other AI companies
Although ARKK liquidated NVIDIA prematurely, Sister Wood said that this does not mean that it is not optimistic about AI investment, and other funds of the Ark Fund still have a small position in NVIDIA, in addition, she also sees other stocks that will "benefit from the foundation laid by NVIDIA".
For every $1 of hardware sold by Nvidia, she said, software vendors and SaaS vendors generate $8 in revenue. The Ark Fund has moved on to "the next target" and is looking at software providers that were in a similar position to Nvidia when we started buying.
Sister Mu directly pointed out that the stock price of Twilio (TWLO.N), an AI cloud communication service provider with heavy positions in the Ark Fund, is only twice its revenue, and it has great prospects in the future and is a future winner of AI.
According to public information, Twilio is an American cloud communication service provider, focusing on the open PaaS platform of communication services, by packaging complex underlying communication functions into APIs and opening them to the outside world, so that web, desktop and mobile applications can easily embed SMS, voice and VoIP (Internet telephony), video and other functions, so as to realize the function of cloud communication. At the same time, AI technology is also used to realize functions such as automatic voice response, text-to-speech, natural language processing, and sentiment analysis. In the first quarter of this year, Twilio had more than 300,000 active customers.
Twilio is ARKK's eleventh largest stock, with a latest market capitalization of $11.6 billion, up 29% during the year, with a mediocre performance and long-term losses.
In addition, ARKK's UiPath (PATH.N) and Teladoc Health (TDOC) are both AI companies.
UiPath is a robotic process automation software company that provides automation solutions for enterprises. Its AI-powered UiPath business automation platform understands, automates, and operates end-to-end processes. UiPath is ARKK's 6th largest heavy stock. The stock has soared 40% so far this year, but the company's share price has continued to decline since its listing in 2021, and in 2022, UiPath shares plunged 70%.
Teladoc Health's platform connects patients with medical professionals through video, phone calls, and text messages. During the peak of the pandemic, when in-person non-emergency medical services were suspended, the demand for telemedicine services surged. However, the company's share price has been lower since its listing in 2021, and the latest price is still at a historical low, up less than 5% during the year, making it ARKK's 12th largest heavy stock.
Sister Mu is optimistic about the development of artificial intelligence and holds heavy positions, but these three companies have limited contributions to the net value of the fund. In fact, her biggest bet in the space is a company not known for its AI stocks: Tesla (TSLA). Tesla has long occupied the largest heavy position in ARKK, with the latest shareholding ratio reaching 11.26%.
Sister Wood once said, "Tesla is actually the biggest player in the field of artificial intelligence, because this electric car company has relatively cutting-edge self-driving technology." ”
According to the official website of Ark Fund, as of July 17, ARKK's five major heavy stocks were electric vehicle giant Tesla, virtual currency exchange Coinbase, streaming media platform Roku, video software Zoom and mobile payment company Block, Inc.
Among the above stocks, Tesla has soared 1.36 times this year, Coinbase has risen nearly 2 times, and Roku has risen 82.22%, contributing more to the rise in ARKK's net worth.
It is worth noting that when Tesla's stock price soared, Sister Wood began to sell Tesla again. Ark Fund reduced its holdings of Tesla shares seven times during June, and the cumulative reduction ratio during the second quarter was close to 11%, cashing out 140 million US dollars.
It is still a loss of nearly seventy percent from the high
Ark Fund is one of the most beautiful fund companies in the US market in 2020, the net value of its products soared 185% in 2020, and there were 5 average returns of more than 140%, among the top ten ETFs with returns in 2020, Ark Fund's products accounted for three, and its founder Sister Mu was once on par with Buffett, known as the "female version of Buffett" and "Wall Street female stock god".
Ark Fund was founded by Sister Mu in 2015, according to the official website of Ark Fund, it has 6 actively managed ETFs, namely ARK Innovation Theme ETF (ARKK), Autonomous Technology and Robotics ETF (ARKQ), Next Generation Internet ETF (ARKW), Gene Revolution ETF (ARKG), Fintech Innovation ETF (QRKF) and Space Exploration and Innovation ETF (ARKX), 2 index ETFs, They are the 3D Printing ETF and the Israel Innovation Fund ETF.
Since its inception, the Ark Fund has attracted a large following. 2020 was the fund's most glorious year, driven by strong performance, Ark Fund's AUM swelled rapidly, from US$3.2 billion at the beginning of the year to US$34.5 billion in December of that year, becoming the largest actively managed ETF.
However, in 2021 and 2022, U.S. stocks continued to be sluggish, and major central banks around the world, including the Federal Reserve, began the most violent synchronous interest rate hike cycle in decades, resulting in a crazy exodus of funds from technology stocks, and the Ark Fund began a two-year shock downturn.
ARKK, the flagship product of the Ark Fund, lost 24% and 67% in 2021 and 2022 respectively, and the price fell from a high of $159.7 to $29.43, and only returned to the upward channel at the beginning of this year.
Driven by the AI sector, technology stocks have made a strong comeback this year, with ARKK up 58% and other ETFs rising to varying degrees.
It is worth noting that the current ARKK price is still nearly seventy percent lower than its peak, which means that the current net value of the fund can only rise by 223%, and the investors who entered the market at the highest level are expected to return their capital.
Although the net value of the Ark Fund rebounded, however, investors voted with their feet, and the net outflow of funds from the fund. According to the official website of the Ark Fund, as of May 31, ARKK's net asset value has shrunk to $7.76 billion. According to foreign media statistics, since mid-October last year, ARKK has had a net outflow of about $200 million, and ARKW has a net outflow of about $80 million. According to financial data firm FactSet, investors pulled $720 million from ARKK in the past 12 months.
Responsible editor: Tactical Heng
Proofreader: Yang Lilin