Cathie Wood’s ARK Invest sold most of its Nvidia stake just before the chipmaker embarked on a rally that added $585 billion in market value

• Cathie Wood’s Ark Invest sold the majority of its Nvidia stake just before the company staged a massive rally.

• As of early October, Ark owned 1.3 million Nvidia shares across its ETFs, but that holding has since dwindled to just 390,000 shares.

• Wood said in February that Nvidia’s valuation was “very high” and that the company was focused on higher-conviction stocks.

Cathie Woods Ark Invest probably wishes it didn’t sell nearly a million shares of Nvidia between early October and today after the chipmaker posted a massive year-to-date gain of more than 160%.

Nvidia stock soared as much as 30% on Thursday after the company’s announcement announced stunning forecasts as the company benefits from a surge in demand for its chipsets supporting generative AI technology platforms such as OpenAI’s ChatGPT and Alphabet’s Bard.

But the active investment manager, which has owned Nvidia on and off since the flagship fund launched in 2014, missed out on massive gains in the process started to downsize his position at Nvidia Heading for a 52-week low in mid-October.

Since Ark Invest’s initial sale on October 5th when it held 1.3 million shares of Nvidia Across all of its ETFs, the stock is up 190%, adding $620 billion to its market value. By the end of November, Nvidia owned just over 500,000 shares of the company.

Today, Ark Invest holds just 390,000 shares in its suite of next-gen technology ETFs. The stock isn’t in his flagship fund, Disruptive Innovation.

Rough calculations by Insider suggest Ark Invest left more than $200 million in potential gains up for grabs when the company sold its Nvidia stake late last year.

The ill-timed Nvidia Ark stock sale highlights the difficulties in actively managing a portfolio of disruptive investments, because even if you choose the right theme to invest in, there’s no guarantee you’re choosing the right companies to invest in can bet.

In February, Wood said Ark’s surge in Nvidia sales was partly due to the company’s valuation being “very high” and that the company was consolidating its portfolio into stocks the company believed more strongly.

The story goes on

“We like Nvidia, we think it will be a good stock. It’s well priced, it’s the ‘check the box’ AI company. “It has to do with valuation,” she told CNBC on Feb. 27. “It has to do with valuation.”

Wood touches down instead UiPath for Ark Invest’s exposure to artificial intelligence, which is the second-largest position across all of its ETFs. In the meantime, Tesla remains Ark Invest’s largest holding I also work on artificial intelligence to help enable its self-driving technology.

But despite the hype surrounding AI this year, these two stocks have only reaped part of the year-to-date gains in the space. UIPath shares are up just 14% year-to-date, while Tesla stock is up an impressive 50%.

Shares in Ark Invest’s Disruptive Innovation ETF fell 2.7% on Thursday, even as the Nasdaq 100 gained 1.7%.

Check out the original article Business Insider