Cathie Wood explains why Nvidia stock exploded and what the ‘real’ AI play is

Technology company Nvidia has been touted as an emerging leader in artificial intelligence (AI) in recent days, but Ark Invest CEO Cathy Wood said she saw the potential in 2014. It is

“At the time, it was just a sleepy old PC gaming chip company, but we saw it as an AI company at the time,” the famous equity investor said on Thursday’s “Kudlow.” Told. “What we’re seeing with his Nvidia today is this massive move in AI themes since we bought it for $5 and today it’s almost $380. I see picks and shovels in action.”

“So Nvidia has done a lot of the heavy lifting over the years, and it’s the #1 hardware business in AI,” the investor continued.

in a while There are no “pure play” AI strainsAs every publicly traded company heavily involved in AI has other businesses, Nvidia has come to be considered one of the leaders in the space despite being in a similar position.

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Nvidia shares are up 113% year-to-date as of Wednesday’s closing, beating technology and AI giants such as Google and Microsoft, whose shares have risen 30% over the same period.

Ark Invest CEO Cathie Wood said on “Kudlow” on Thursday, May 25, 2023, that the “real game” in the AI ​​sector is on the software side. (Getty Images/Photo Illustration/FOX News)

After markets closed Wednesday and Nvidia held its earnings call, the company’s shares rose as much as 28% in after-hours trading, making it the world’s most valuable chip maker and Wall Street’s fifth most valuable company. extended the lead.

“We believe that the real role of artificial intelligence at this point lies on the software side…”

– Cathie Wood, CEO and CIO, Ark Invest

Wood said spending on AI hardware is expected to reach $1.7 trillion by 2030, while Nvidia’s revenue base is estimated at just $40 billion this year.

“It’s a huge market opportunity, but we saw it really take off after that because we saw the ratings from Nvidia thanks to ChatGPT. %,” said the CEO and CIO of Ark Invest, adding that it will “double in the next five years.”

But she extended her company’s intuition that the “real role” of artificial intelligence today really lies on the software side.

“Companies with visionary leaders, superior distribution, extensive global distribution and unique data will be the biggest beneficiaries,” explained Wood.


Across the tech sector, lead investors expressed their belief that people are beginning to understand the productivity gains AI can bring.

“In terms of competition, NVIDIA has about 90% of the GPU market, which dominates AI training and, increasingly, inference. But there will be competition,” warned Wood. . “Especially now that this market is on fire, [Advanced Micro Devices] Indeed, hyperscalers themselves, Metaplatform, Alphabet and Amazon are developing their own chips. So does Tesla. ”

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Eric Revell of FOX Business contributed to this report.

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