Auntie Cathy Predicts: The Next Wave of Opportunities is in SaaS
"For every $1 of hardware sold by $NVIDIA Corp(NVDA)$, software vendors and SaaS providers generate $8 in revenue."
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Cathie Wood, the founder of Ark Investment Management $ARK Innovation ETF(ARKK)$, stated that software providers will be the next beneficiaries after the AI frenzy.
On Tuesday, Cathie Wood, known for her bets on "disruptive innovation," said in a media interview, "While Nvidia will perform well over time, Ark has shifted its focus to the 'next target,' and we are looking at software providers that were in a similar position to Nvidia when we started buying."
The AI feast propelled Nvidia to a trillion-dollar market capitalization, but Cathie Wood's flagship fund, known for its bets on "disruptive innovation," sold its holdings in Nvidia in early January, missing out on a $560 billion rebound. Auntie Cathy previously defended herself, stating that there are cyclical risks in the chip industry.
Furthermore, Auntie Cathy pointed out that the larger market for artificial intelligence lies in software, stating that for every $1 of hardware sold by Nvidia, software vendors and SaaS providers generate $8 in revenue.
Now, Auntie Cathy is betting on software stocks that she expects to eventually grow to the scale of Nvidia, such as $UiPath(PATH)$, $Twilio(TWLO)$, $Teladoc Health Inc.(TDOC)$ with her fund holding these three stocks.
UiPath, based in New York, soared to over $90 per share after its IPO in 2021 but subsequently plummeted by 80%. Twilio, headquartered in San Francisco, has fallen 85% from its peak in 2021, while Teladoc Health has dropped over 90% from its high point in the same year.
In addition, Auntie Cathy reiterated that Tesla is the "biggest AI concept stock" and expects its stock price to rise from the current level of around $200 to $2000 by 2027, driven by autonomous driving technology. "We believe that by 2038, the revenue of the global autonomous taxi platform will transform from almost zero to $10 trillion. Many people see Tesla as an automotive stock, but we don't, as it is much more than just a car manufacturer."
It is worth mentioning that Auntie Cathy's fund has recently underperformed, with the Ark Innovation ETF falling over 10% since its peak in early February, while the Nasdaq 100 index jumped 12% during the same period.
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When AAPL MSFT AMZN etc hit $1T they stayed above never went below and grew from there NVDA hit $1T and literally crashed like some low float zero volume meme stonk
sold all my ARKK around $120 and put it all in Nvidia. Up about 3x for a 6 figure gain. I would have lost about 80% of my investment had I stuck with her.
I was thinking of getting back into ARKK but as she said she didn't regret missing out on NVDA's monster run it shows me that she's willing to hurt investors in order to protect her own pride.
Can somebody explain to Cathy that comparing PATH to NVDA is not smart. PATH is using an old-fashioned AI/ML to parse documents and extract data from them. MSFT will make them obsolete.
NVDA created the A.I bubble which created a bubble in the chip sector, now that the chip sector will get hurt harder the A.I bubble will get hit. This is pretty simple
What is really mind blowing is when someone says NVDA sealed this and that deal but NVDA never says how much the deal is worth like reputable companies
ARKK continues to reward us. Bought in the first week of 2023 and already up almost 40%. The ETF that’s like a money tree. 💰💰💰
The internal ASIC solutions at AMZN, GOOGL and META cannot do that. At best, they can be used for inferencing.
Great ariticle, would you like to share it?
what’s in her mind again this time?
haha shouldn’t we sell what she buys?