Cathie Wood Challenges The Hype: Is Nvidia Really The Only AI Play?

Despite Nvidia Corp.’s NVDA impressive AI prospects that have garnered widespread attention from investors and analysts, Ark Investment Management founder Cathie Wood remains unconvinced.

Is Nvidia Overvalued? Wood took to Twitter on Monday to express her view that many investors mistakenly perceive Nvidia as the sole player in the AI field.

She emphasized that Ark had identified Nvidia as a premier AI investment opportunity as early as 2014 when it was commonly regarded as merely a PC gaming stock. At the time, the stock was priced at approximately $5 and has since skyrocketed by around 80-fold.

Wood remarked, “Investors seem to think NVDA is the only AI play. It’s not!”

Ark’s Perspective: While Ark acknowledges Nvidia’s continued importance in powering the AI revolution, the firm suggests that the stock may have outpaced its current value.

Wood stated, “At 25 times expected revenue for this year, however, $NVDA is priced ahead of the curve.”

Alternative Opportunities: Wood highlighted several other companies that Ark believes have a strong global distribution and possess substantial proprietary data, positioning them as significant beneficiaries of AI advancements.

She sees them raking in "revenues and earnings surprising significantly on the high side of expectations during the years ahead."

Wood specifically mentioned Tesla, Inc. TSLA as the most obvious beneficiary of recent AI breakthroughs. With a revenue total addressable market opportunity in autonomous mobility projected at $8 trillion to $10 trillion by 2030, Wood remains bullish on Tesla.

“But, based on our research for the last five to six years, @ArkInvest sees dozens of AI winners!” Wood said.

Price Action: In premarket trading on Tuesday, Nvidia saw a 3.68% increase, reaching $403.79, according to data from Benzinga Pro.

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