ARK Invest's Cathie Wood Says Nvidia Is 'Really Expensive' And 'Very Obvious' — Here Are 2 Less Obvious AI Plays She's Betting On

Artificial intelligence (AI) has become the hottest trend in the tech sphere.

Just take a look at Nvidia Corp. NVDA, which has been one of the biggest beneficiaries of investors' increasing enthusiasm for AI. Shares of the chip-making giant have surged 191% year to date, allowing the company to cross $1 trillion in market cap.

But according to ARK Invest CEO Cathie Wood, there could be better ways to gain access to the booming sector.

"We're really focused on those companies that most people aren't talking about right now. Nvidia is easy, but it's also really expensive and very obvious," she said at a conference in Munich, Bloomberg reported.

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While some analysts may disagree with Wood's view on Nvidia — Wall Street has set significant price targets for the company — she has identified two less obvious plays on AI.

Here's a closer look at the duo.

UiPath Inc. PATH

UiPath is a robotic process automation software company that provides automation solutions for businesses. Its AI-powered UiPath Business Automation Platform is capable of understanding, automating and operating end-to-end processes.

In the fiscal quarter ended July 31, the company's revenue grew 19% year over year to $287.3 million. Its dollar-based net retention rate was 121%.

Wood said that while UiPath is "not sexy," it is "very profitable."

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The stock has surged 32% year to date, but it hasn't always been a hot commodity: In 2022, UiPath shares plunged 70%.

Wood's flagship fund Ark Innovation ETF ARKK owns 27,747,702 shares of UiPath. With the position valued at $437.86 million, UiPath is the fifth-largest holding at the fund.

Twilio Inc. TWLO

Twilio's cloud communications platform allows businesses to develop and integrate various communication channels into their applications. Its application programming interfaces enable developers to incorporate voice, messaging and video seamlessly, helping companies enhance customer engagement.

At the end of June, Twilio had more than 304,000 active customer accounts. Meanwhile, second-quarter revenue rose 10% year over year to $1.04 billion.

In a conference call with analysts earlier this year, Twilio Co-Founder and CEO Jeff Lawson said he believes that artificial intelligence "will be a material accelerant over time for Twilio's business."

Twilio shares have climbed 13% year to date but are still down 21% over the last 12 months.

Ark Innovation ETF holds 4,849,250 shares of Twilio, a stake with a market value of $282.61 million.

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