Back in 2022, the star portfolio manager of ARK Invest, Cathie Wood, had ruffled feathers by boldly declaring that her flagship ARK Innovation ETF (ARKK) will record a 50 percent CAGR over the next 5 years. Fast forward to 2024, and ARKK is down by around 5 percent so far this year, constituting a monumental deviation relative to Cathie Wood's tall claims. The reason behind this divergence: the absence of NVIDIA.
The above snippet details the top holdings of ARK Innovation Fund ETF. The absence of NVIDIA in this portfolio has acted as a phenomenal drag on the ETF's recent performance. After all, NVIDIA shares are currently up 168 percent so far this year.
Of course, Cathie Wood is known for her quixotic market timing style, which involves selling runners to buy laggards. This style, however, does not work in a market characterized by a very narrow breadth, as is the case at present. By selling NVIDIA early and refusing to let her "runner" holdings actually run, Wood eliminated a major source of alpha for her flagship ETF.
Cathie deleted the original tweet, but selling NVDA was obviously a mistake. Mistakes are not avoidable, but refusing to learn from it is not wise.
@ARKInvest @CathieDWood should join my Patreon, I am sure they can afford a cup of coffee a month. $NVDA pic.twitter.com/LfXMcjSuJZ
— The AI Investor (@The_AI_Investor) July 15, 2024
This brings us to the crux of the matter. In a deleted thread on X, Cathie Wood admitted that had she known the market would reward NVIDIA to the "exclusion of stocks that will be prime beneficiaries of AI," she would not have sold it. Well, everyone is sure to have a 20/20 vision in hindsight. Alpha generation is all about foresight, something that Cathie Wood materially lacked in this instance at least.
$NVDA has increased its chip orders from $TSM by 25% for the new AI Blackwell-architecture GPUs, using a 4nm process.
Production will start soon, driven by strong demand from Amazon, Google, Meta, Microsoft, and Dell. Nvidia expects to ship 60,000 GB200 NVL72 and GB200 NVL36…
— Wall St Engine (@wallstengine) July 15, 2024
Meanwhile, as per the latest reporting out of Asia, NVIDIA has increased its 4nm-based chip orders with TSMC by 25 percent. The company expects to deliver around 60,000 units of the GB200 NVL72 and the GB200 NVL36 servers, priced at $3 million and $1.8 million per unit respectively.
As we noted recently, the AI GPU supply chain has seen massive improvements within the past few quarters, all thanks to NVIDIA's efforts in upscaling the GPU supply chain by adding new partners and demanding suppliers to enhance existing production facilities.
About the author: Writing is my one incontrovertible passion. Over the past six years, he has authored over 2,200 distinct articles on financial and tech-related topics, spanning nearly 1 million words. And he has been a member of Wcctech mobile team since 2025. As an alumnus of the University of Toronto, Rotman Commerce Program, I bring nuance, in-depth knowledge, and a unique perspective to every topic that I cover. When I'm not writing, I'm traveling the world, exploring hidden confectionaries and restaurants as an aspiring food connoisseur.
Follow Wccftech on Google to get more of our news coverage in your feeds.
