Cathie Wood thinks Nvidia is overrated
Benzinga – Despite the excellent prospects of Nvidia Corp. (:NVDA) in the field of AI, which have attracted the attention of investors and analysts, the founder of Ark Investment Management Cathie Wood she is not convinced.
Is Nvidia overrated?
Wood posted on Twitter on Monday her view that many investors misperceive Nvidia as the sole AI player.
He pointed out that Ark had identified Nvidia as a major investment opportunity in AI as early as 2014, when it was commonly thought of as just a PC gaming title. At the time, the stock was priced around $5 and has since skyrocketed about 80x.
Wood said, “Investors seem to think NVDA is the only AI-related business. It’s not!”
Perspective of Ark
While Ark acknowledges Nvidia’s continued importance in fueling the AI revolution, the company suggests the stock may be past its current value.
Wood said, “At 25 times anticipated revenue this year, however, $NVDA is priced above the curve.”
Alternative opportunities
Wood pointed to several other companies that Ark believes have strong global distribution and possess substantial proprietary data, which positions them as significant beneficiaries of AI advances.
According to the author, “revenues and earnings will surprise significantly compared to expectations in the coming years”.
In particular, Wood cited Tesla (NASDAQ:), Inc. (NASDAQ:TSLA) as the most obvious beneficiary of recent breakthroughs in artificial intelligence. With a total addressable market opportunity for autonomous mobility estimated at $8 trillion to $10 trillion by 2030, Wood remains optimistic about Tesla.
“But based on our research over the past five to six years, @ArkInvest sees dozens of AI winners!” Wood said.
Price movement
In pre-market trading on Tuesday, Nvidia rose 3.68% to $403.79, according to data from Benzinga Pro.
Read the article also in Benzinga Italia