YTD performance : ARKK 32.44%, UVXY -31.5% No conclusion other then what kind of fool has been continually buying UVXY since it topped out mid-October.
Cathie Wood’s ARKK Dumped Nvidia Stock Before $560 Billion Surge She said chipmaker’s valuation was ‘very high’ in February Wood’s firm holds Nvidia across several of its smaller ETFs Cathie Wood Photographer: Eva Marie Uzcategui/Bloomberg By Emily Graffeo 26 May 2023 https://www.bloomberg.com/news/arti...ck-before-560-billion-surge?srnd=premium-asia Nvidia Corp. stake in early January. Then, came the artificial intelligence frenzy that sent the stock and its big tech peers on a tear. The chipmaker has added around $560 billion in market capitalization since Wood dumped her shares — with the last $200 billion of that surge coming overnight after the company handily beat earnings. Although Wood holds Nvidia across several of her smaller funds, investors in the flagship ARK Innovation ETF (ticker ARKK) have mostly been left out of this year’s blistering 159.90% rally. In February, when Nvidia traded for $234 a share, roughly 50 times forward earnings, Wood said the valuation was “very high.” “We like Nvidia, we think it’s going to be a good stock. It’s priced —it’s the ‘check-the-box’ AI company,” Wood told CNBC on Feb 27. “For a flagship fund, where we’ve consolidated towards our highest conviction names, part of that has to do with valuation.” A spokesperson for ARK Investment Management said the company doesn’t comment on trading activity. Wood has been a long-time fan of Nvidia, but her conviction on the stock has wavered at times. When ARKK first launched in 2014, the chipmaker was one of the fund’s top holdings. And since the fund’s inception, Nvidia has contributed 13% of the fund’s 112% total return, according to data compiled by Bloomberg. Only Tesla Inc., the Grayscale Bitcoin Trust, and Invitae Corp. have contributed more to the ETF’s total return since inception. “I’m sure Cathie would have loved to have had Nvidia on this recent pop, but Nvidia has been very good to her. She was into the stock before it was cool,” said Eric Balchunas, senior ETF analyst at Bloomberg Intelligence. But her big bets on Nvidia were before the chipmaker became a megacap stock. For newer ARKK investors, Wood has left a lot of Nvidia gains on the table. In October — when the stock started to recover from its lowest level since August 2020 — ARKK held over 750,000 shares. Wood trimmed that position to just under 39,000 shares by late November, slashing that to zero by mid-January, according to data compiled by Bloomberg. Despite ARK’s focus on disruptive innovation, its flagship fund is mostly absent of the AI-linked stocks that have soared this year. As of 2:44 p.m. New York time, ARKK was down 3% on the day, while Nvidia soared 25% and the Nasdaq 100 was up 2.4%. Her remaining Nvidia stake spread across four smaller ARK ETFs is worth $150 million. Wood holds $25 million of Nvidia peer Advanced Micro Devices Inc. in the ARK Next Generation Internet ETF (ARKW). Other artificial-intelligence linked stocks like Taiwan Semiconductor Manufacturing Co. and C3.ai aren’t in any of the ARK portfolios. “This is one risk with concentrated active managers — that they miss a theme or the right names within that theme,” said Todd Sohn, an ETF strategist at Strategas. “It’s strange ARK doesn’t have more semis exposure given their importance in the AI/autonomous play.”
Cathie Wood blames chip-cycle risks for Nvidia exit Carly Wanna and Caroline Hyde May 27, 2023 https://www.afr.com/world/north-ame...p-cycle-risks-for-nvidia-exit-20230527-p5dbqw Cathie Wood defended her firm’s decision to bail on Nvidia before the chipmaker’s shares surged 160 per cent, saying the computer-chip industry’s boom-bust cycle poses risks. Wood’s flagship ARK Innovation ETF (ticker ARKK) cut its holding in Nvidia in January and missed out on most of the rally that added more than half a trillion dollars in market value. Nvidia jumped 24 per cent Thursday (Friday AEDT) alone after forecasting $US11 billion ($17 billion) in sales this quarter, 53 per cent more than analysts expected. Cathie Wood’s funds sold out Nvidia in January. Bloomberg “As far as Nvidia goes, there are a few reasons we take some pause,” Wood said in an interview on Bloomberg TV. She said when she hears, “shortages, shortages, shortages about GPUs or anything, I begin to think about the cyclicality of a group.” Nvidia also faces growing competition in the battle to produce chips to power the computing infrastructure behind artificial intelligence programs, Wood said, citing companies like Tesla, Meta Platforms, and Alphabet that are developing their own chips. While Wood’s flagship fund dropped its holdings to Nvidia, some of the firm’s “more specialised portfolios,” including the ARK Next Generation Internet ETF (ARKW) and the ARK Fintech Innovation ETF (ARKF), still retain some exposure to the company. “We have not gotten much pushback,” she said regarding the decision to drop Nvidia, which she describes as “a check-the-box stock.” ARKK has climbed 25 per cent so far this year, outpacing the S&P 500’s 9.4 per cent gain. The Nasdaq 100 Index that houses the megacap tech companies that have powered the market’s gains in 2023 is up more than 30 per cent. Nvidia has been one of the main beneficiaries of the AI boom, seeing its sales surge on demand for chips. Marvell Technologies rallied 29 per cent Friday (Saturday AEDT) after saying its revenue from AI products would double in the current fiscal year. ARKK holds neither. It was the biggest intraday increase since October 2001, climbing as high as $US63.42 in New York, bringing its year-to-date gain to more than 70 per cent. “We’re just pivoting to another set of plays that most people have not discovered yet,” Wood said. “Much like they did not understand that Nvidia was an AI play, really, until very recently.” Wood said Meta’s strategy of focusing on AI was good, although the company does not appear in the firm’s flagship portfolio. Meta’s LLaMA AI language model is “able to deliver better models” using less computing power and more data, she said. “Meta is interesting to us,” she said, adding that she likes “the fact that Mark Zuckerberg is now prioritising artificial intelligence as opposed to the metaverse, which was really what he was focused on last year.” Marvell said revenue this quarter will be about $1.33 billion, roughly in line with analysts’ predictions. Bloomberg
Spy goes up 4%, QQQ up 15% and UVXY & SOXS drop 70 - 80%, past 12 months. The odds heavily stacked against the bet imo.