Cash Wood, known as the 'Money Tree Sister,' who cut losses on Nvidia just before its stock surged, identified UiPath and Twilio as emerging beneficiaries in the artificial intelligence (AI) sector, Bloomberg reported on the 25th (local time).
Cash Wood, CEO of Ark Investment, said at an investor conference held in Munich, Germany, on the same day, "We currently focus on companies that most people do not mention," adding, "(In AI investment) Nvidia may be an easy choice, but it is too expensive and too obvious."
He said Nvidia has become too obvious an AI-related stock and that he would choose other stocks with potential to rise more as AI advances. He pointed to UiPath and Twilio, companies specializing in office automation software, instead of Nvidia.
Wood said, "UiPath can develop into a platform that all companies can utilize," adding, "It is not flashy, but it is very profitable."
He also introduced Twilio, a cloud communication platform company, noting that it provides communication services for Uber and food delivery platforms, mentioning that it supported over 100 million communication services last year alone. He explained, "The rapid increase in services provided by Twilio is aided by AI."
UiPath offers software that digitizes repetitive tasks and processes them automatically. UiPath counts Microsoft (MS) as a client and supplies automation solutions to MS's cloud service Azure. The number of clients has surged to 10,800, nearly tripling from 3,000 in 2019.
UiPath and Twilio, both listed on the New York Stock Exchange, have seen their stock prices rise 36% and 17%, respectively, so far this year (based on closing prices on the day).
Wood sold a large amount of Nvidia shares at the end of May, just before Nvidia raised its AI revenue forecast. He said Nvidia's stock was overvalued and sold a significant portion of his Nvidia holdings. Subsequently, the stock rallied, supported by the upward revision of AI revenue forecasts.
Wood's flagship fund, the Ark Innovation ETF, began selling Nvidia shares in January this year, and since Wood's sale, the stock price has risen more than 180%. During this period, the market capitalization surpassed $1 trillion. Wood used the funds from selling Nvidia shares to heavily purchase Zoom Video, and Wood's impeccable timing in selling dealt a direct blow to his reputation as a leading investor in tech stocks.
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