Cathie Wood AI Stock Portfolio, Ranked From Best to Worst 2023

Introduction

Cathie Wood, a partner of Ark Invest, is renowned for her investments in revolutionary technology. As of June 26, Ark Invest’s top holdings include Tesla shares, UiPath (PATH), Coinbase, Roku (ROKU), Zoom Video, and Roku. The final five positions in Cathie Wood AI Stock Portfolio’s top ten holdings are Exact Sciences, Square-parent Block (SQ), Shopify, Teladoc Health (TDOC), and DKNG stock. The mega investor has staked a significant amount of money on artificial intelligence (AI), which is recognised as one of the most revolutionary and disruptive technologies in use today. Speaking about AI stocks, Nvidia Corp.’s (NASDAQ: NVDA) recent performance is difficult to ignore.

Cathie Wood AI Stock Investments

“In our opinion, software providers, SaaS [software as a service] providers will generate $8 in revenue for every dollar of hardware that Nvidia sells,” she added. So, instead of going to Nvidia as we did when we initially got it, “we are looking to the software providers.” Next, the mega investor listed three software firms she thought would succeed as a result of AI. Look at the group in addition to the business she refers to as “the biggest artificial intelligence play.”

UiPath Inc. (NYSE: PATH)

Automation solutions for enterprises are offered by the robotic process automation software provider UiPath. Its UiPath Business Automation Platform, which is driven by AI, is capable of comprehending, automating, and managing whole processes. The business’s revenue increased by 18% year over year to $289.6 million in the first quarter of 2023. Notably, its net retention percentage on a dollar basis was 122%. The stock has increased 47% so far this year, but it wasn’t always in high demand: in 2022, shares of UiPath fell 70%. Ownership of UiPath by Wood’s Ark Innovation ETF is 28,865,375 shares. UiPath is Ark’s fourth-largest investment with a position valued at $517.28 million.

Twilio Inc. (NYSE: TWLO)

Businesses may create and incorporate a variety of communication channels into their apps using the cloud communications platform from Twilio. Developers can easily combine audio, text, and video thanks to its application programming interfaces, which help businesses increase client interaction. Twilio exceeded 300,000 active customer accounts in the first quarter. At $1.01 billion, revenue increased by 15% over the previous year. Twilio Co-Founder and CEO Jeff Lawson stated in the company’s most recent earnings conference call that he thinks artificial intelligence “will be a material accelerant over time for Twilio’s business.

Teladoc Health Inc. (NYSE: TDOC)

Additionally, Teladoc Health, a provider of telemedicine, is owned by Wood’s flagship fund for $301.07 million. Through video, phone, and chat, the company’s platform links patients with medical specialists. The need for telehealth services surged at the height of the COVID-19 epidemic when non-emergency in-person medical care was temporarily stopped. Due to a 98% increase in income in 2020, Teladoc caught the attention of several investors. Even though the epidemic is largely behind us, the firm is still growing. Revenue for Teladoc increased 11% over the same period last year. The stock, nevertheless, was unable to keep up its upward speed. With a share price of $24.30, Teladoc has dropped more than 90% from its record high in February 2021.

The Biggest Artificial Intelligence Play

Tesla Inc. (NASDAQ: TSLA), a business that isn’t well-known for being an AI stock, is Wood’s greatest AI bet. Tesla is the largest artificial intelligence play, we speak about it all the time, she remarked. The autonomous driving technology used by the electric car manufacturer is the cause. With a weighted of 11.81%, Tesla is Ark’s largest position. In 2030, Wood projects that autonomous taxi platforms would generate $8 to $10 trillion in worldwide income, up from “almost zero right now.”

The expanding market for autonomous taxis may boost Tesla’s share price to a completely new level as a result of its strengths in that area. If our study is accurate, we anticipate that the stock will be worth $2,000 in five years, or 2027, she added. Given that the current price of a Tesla share is roughly $235, Wood’s price goal suggests a potential gain of more than 750%.

Investing in disruptive innovation has the potential to be tremendously profitable, but it may also seem like a roller coaster. When compared to their top in November 2021, Tesla shares are still down more than 40%, despite having more than quadrupled the year so far.

If you don’t like that level of uncertainty, you might want to try investing in sectors of the economy that are slowly changing but still provide investors with respectable monetary returns, such as those that supply goods and services for fundamental human necessities like food and shelter. There are ways to invest in these vital service companies in the private market for those who want to produce passive income without the volatility associated with publicly listed equities.

RANKSTOCKMARKET CAP
1Alphabet (GOOG -0.89%) (GOOGL -0.83%)$1.7 trillion
2Amazon (AMZN -1.89%)$1.4 trillion
3Microsoft (MSFT -0.24%)$2.4 trillion
4Meta Platforms (META -2.54%)$805 billion
5Tesla (TSLA -3.16%)$783 billion
6Nvidia (NVDA -1.03%) $1.1 trillion
7Palantir Technologies (PLTR 0.52%)$36 billion
8Advanced Micro Devices (AMD -3.74%)$183 billion
9Taiwan Semiconductor Manufacturing (TSM 0.11%)$448 billion
10JD.com (JD -3.03%)$62 billion
11Teradyne (TER -0.61%)$16 billion
12Accolade (ACCD -3.48%)$1 billion
13Schrodinger (SDGR -4.67%)$3 billion
14Recursion Pharmaceuticals (RXRX -5.33%)$2 billion

Top-tier Titans

The majority of the stocks that I’d describe as top-tier AI titans are held by Ark Invest ETFs. Wood’s top five, in my opinion, are these mega-cap AI leaders. For three key reasons, I’ve placed Alphabet at the top of the list. With its Google DeepMind division, the corporation is unquestionably a leader in AI.

Second, AI provides Alphabet with a variety of development opportunities, including hosting AI apps on Google Cloud and developing self-driving vehicle technology through its Waymo subsidiary. Third, compared to other top-tier AI competitors, the company is perhaps the most reasonably valued.

NASDAQ: GOOGLE

  • IMPORTANT DATA POINTS
  • Market Cap $1,637 billion
  • Day’s Range $83.34 – $133.74 52 Week Range $128.56 – $129.74
  • Volume 2,075,935 Average Volume 32,137,018 Gross Margin 55.38 % Dividend Yield N/A

The other four of the top five, though, all have a lot going for them. Similar to Alphabet, Amazon and Microsoft should gain a lot from improvements in AI. The open-source approach to AI taken by Meta may be very successful. And with self-driving robotaxis, Tesla has a large potential market opportunity.

Asterisks for AI

The following five stocks in the ranking all boast strong growth potential as a result of AI. But I believe that each one also has an asterisk next to it, which keeps them from making the top five. This year, AI-driven demand for Nvidia’s graphics processing units has caused its stock to soar. However, Nvidia’s value is its main issue. My concern is that the high-flying company is about to see a significant downturn since shares are priced at about 44 times revenues.

NASDAQ: NVDA

  • IMPORTANT DATA POINTS
  • Market Cap $1,085 billion
  • Day’s Range: $108.13 to $480.88 52-week Range: $440.09 to $446.75
  • Volume 7,689,151 Average Volume 50,925,615 Margin of Gross 56.31% 0.04% dividend yield

Palantir and, to a lesser extent, AMD have a similar tale to tell. In the neighbourhood of 82x is Palantir’s forward earnings multiple. That’s high for a business that only had 13% sales growth year over year in its most recent quarter. In the second quarter, AMD’s sales fell 18% year over year, but I anticipate better times are still to come. The moat at Taiwan Semi is magnificent.

Leaders in AI, including Nvidia and AMD, utilize its CPUs. JD.com is extensively pursuing AI software. Its stock is likewise absurdly low-cost. However, one asterisk applies to both stocks: China. Uncertainties arise from the potential for Chinese government influence in JD’s operations. Furthermore, the dangers of investing in Taiwan Semi are heightened by the potential for a Chinese invasion of Taiwan.

Up-and-comers

The remaining four AI stocks in Wood’s portfolio are what I refer to as her up-and-comers. While all of these stocks are gaining recognition in the field of artificial intelligence, they are still far smaller (and riskier) than the other AI leaders in which Ark Invest holds interests. Autonomous mobile robots are tested using Teradyne’s technology. Because it is already profitable and the other three startups aren’t, I included it before the other up-and-comers.

NASDAQ: TER

  • IMPORTANT DATA POINTS
  • $16 billion in market capitalization
  • Day Range: $67.81 to $119.20 52 weeks; Volume: 42,929; average volume: 1,805,498
  • The margin of profit 58.57% 0.43% dividend yield.

All of Wood’s low-tier AI stocks, meanwhile, have promise, and we like that. Accolade is creating personalised healthcare solutions with AI. AI is being used in medicine development using Schrodinger and Recursion.  Wood would likely argue that Tesla ought to be placed first rather than Alphabet. With more than 7.6% of the total assets held by the ETFs, the electric car manufacturer is the largest investment in her combined Ark Invest portfolio.

However, none of the remaining top five AI stocks in my rating have a weight greater than 0.22%.  My biggest criticism of Wood is that she could have invested more substantially in the greatest stocks. But overall, I believe that her holdings at Ark Invest comprise a strong group of AI stocks.

Conclusion

A lot of criticism has been levelled at Cathie Wood’s Ark Invest because of its high-risk, high-reward investing strategy. But as they prepare to engage in speculative activity once more, investors are once more paying attention to Wood’s astute analysis of the IT sector. Ark and Wood are investing extensively in the artificial intelligence (AI) industry, as have the majority of investors in recent weeks. When everything is said and done, Wood’s selection of AI stocks may turn out to be among the best-performing ones.

FAQs

Ark, does it invest in AI?

Cathie Wood, an investor at Ark Invest, is renowned for supporting revolutionary technology. The mega investor has staked a significant amount of money on artificial intelligence (AI), which is recognized as one of the most revolutionary and disruptive technologies in use today. It’s difficult to overlook what Nvidia Corp. is doing when discussing AI stocks.

What AI stock is Cathie Wood’s favourite?

The largest artificial intelligence play is titled. Tesla Inc. (NASDAQ: TSLA), a business that isn’t well-known for being an AI stock, is Wood’s greatest AI bet.

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