Cathie Wood, the founder of Ark Invest, has expressed her optimism about the artificial intelligence (AI) boom and its potential for investors in the firm’s flagship Ark Innovation ETF (ARKK). In an interview with Bob Pisani on CNBC’s “ETF Edge,” Wood declared that the dream of AI has become a reality, and her fund is well-prepared to benefit from it.
The Ark Innovation fund, which focuses on disruptive technologies such as AI, has seen a 17% increase in value this year. This rise has coincided with the surge in AI-driven mega-cap tech companies. However, it has underperformed the Invesco QQQ Trust, which has experienced a 35% growth in the same period. Although the Innovation ETF is still considerably below its all-time high, reached on February 12, 2021, Wood remains positive about the potential of AI-linked stocks within the fund.
Wood advises investors to exercise caution when it comes to placing their AI bets. She specifically mentioned the “Magnificent Seven” mega-cap tech stocks, excluding Tesla, which is the top holding in the ETF. While expressing confidence in Tesla’s prospects, Wood expressed doubts about the other companies. She believes that AI will be a highly disruptive force and emphasizes the importance of careful consideration in selecting investments in this sector.
Wood also highlighted the rapid advances in AI interfaces and their potential to create a new generation of industry leaders. She believes that the Ark Innovation ETF is a forward-looking investment, positioning investors to benefit from the future of AI. As the companies within the ETF harness the power of these new platforms, Wood anticipates that the element of surprise will play a significant role in their success.
The boom of artificial intelligence presents a lucrative opportunity for investors in Ark Invest’s Ark Innovation ETF. While the fund has faced challenges and has not performed as strongly as some competitors, Wood emphasizes the potential for AI-linked stocks within the portfolio. However, she also suggests careful consideration and discernment in choosing investments in this sector. With the rapid advancements in AI interfaces, the ETF positions investors to benefit from the rise of industry leaders of the future. As the power of AI continues to unfold, the element of surprise may play a significant role in the success of companies within the Ark Innovation ETF.
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