Nvidia is 'priced ahead of the curve' says Cathie Wood — as ARK Invest sold most of its stake in the company ahead of a bumper rally

Cathie Wood's ARK Invest sold nearly 1 million shares of Nvidia before their recent rally.

Patrick T. Fallon/Getty Images

• ARK Invest CEO Cathie Wood tweeted that Nvidia's shares are too expensive.
• Nvidia shares are up 167% this year due to the boom in generative AI.
• But ARK Invest sold nearly 1 million shares of Nvidia between early October and Friday — missing out on their massive rally.

Cathie Wood — whose ARK Invest sold the bulk of its Nvidia stake ahead of the stock's massive rally last week — thinks the chipmaker's shares are too expensive.

"Since 2014, @ARKInvest has believed that Nvidia saw the AI future before most other chip companies, and now we believe it will continue to power the AI age," she tweeted on Monday.

However, the stock is now "priced ahead of the curve," she added, stating that it reflected a market valuation of 25 times its estimated sales for the current fiscal year. 

—Cathie Wood (@CathieDWood) May 29, 2023

 

Wood's comments came after the chipmaker's shares surged nearly 25% on Friday following its blockbuster first-quarter results from the generative artificial intelligence boom.

The stunning rally sent Nvidia CEO Jensen Huang's net worth soaring by almost $7 billion last week, per Bloomberg Billionaires Index. 

Given that the ARK Invest CEO has been anticipating the AI boom, her comments may seem unusual.

ARK Invest sold nearly 1 million shares of Nvidia between early October and Friday — before their massive rally.

Ballpark calculations by Insider suggest Ark Invest lost out on more than $200 million in potential profits when it sold down its Nvidia stake throughout the end of last year, Matthew Fox reported on Friday. 

But Wood sees opportunities elsewhere, adding Nvidia isn't the only AI play.

"Other companies with visionary leaders, strong global distribution and, perhaps most important, large high-quality pools of proprietary data should be big #AI winners," she added in her tweet thread.

She pointed to electric vehicle maker Tesla — although there are "dozens" more AI winners, she added.

Nvidia's share price extended gains to close 2.6% higher at $389.46 on Friday. The stock is up 167% this year so far. The US markets were closed Monday for a public holiday.

ARK Invest did not immediately respond to Insider's request for comment sent outside regular business hours.

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