Cathie Wood, the CEO and founder of ARK Investment Management, predicts that software providers will be the next beneficiaries of the growing interest in artificial intelligence (AI) technology, following in the footsteps of Nvidia. In an interview on Bloomberg TV, Wood revealed that her flagship ARK Innovation ETF is actively seeking out software companies that are currently in a similar position to where Nvidia was when ARK first invested in it.
While ARK reduced its stake in Nvidia in January, missing out on the recent rally that briefly pushed the company's valuation above $1 trillion, Wood defended the decision in a recent tweet, arguing that Nvidia shares were "priced ahead of the curve."
Moving forward, Wood expressed her focus on AI-related software players, such as UiPath based in New York, Twilio based in San Francisco, and telehealth group Teladoc. Although these companies have experienced significant share price declines in recent months, Wood believes they have great potential.
Wood highlighted the revenue generation potential of software providers and software-as-a-service (SaaS) providers in the AI industry, noting that for every dollar of hardware Nvidia sells, these software companies could generate eight dollars in revenue.
Additionally, Wood sees Tesla as a major player in the artificial intelligence space in the coming years. She predicts that Tesla's stock price will reach $2,000 by 2027, driven by the increasing demand for autonomous technology. Even without this driver, Wood expects a "massive shift" towards electric vehicles that could push Tesla's shares to at least $400.
As interest in AI continues to grow, software providers are poised to benefit from the evolving landscape, and Wood's ARK Innovation ETF is actively seeking out promising opportunities in this sector.
