For Cathie Wood’s exchange-traded funds to recover, Nvidia Corporation stock (NASDAQ: NVDA), a longtime favorite of hers and a similarly wounded large-cap technology firm may play a role.
Nvidia Corporation Stock (NASDAQ: NVDA) Performance
According to the company’s daily trading statements, ETFs run by the growth stock advocate ARK Investment Management LLC have been buying up Nvidia Corporation stock (NASDAQ: NVDA) shares, more than 400,000 in September. As of June 30, ARK funds held more than 675,000 shares, according to information gathered by Bloomberg.
The most significant decline among tech stocks, with a market capitalization of $100 billion or more this year, has been Nvidia’s share price, which has fallen by 55%. Sales growth has slowed down at a time when quickly growing companies’ valuations are under a lot of pressure due to rising interest rates. On Monday, the stock increased 0.5%.
The stock is now less expensive than the previous year, when its market value was heading toward $1 trillion. However, it is still priced above the average for the past ten years at 32 times the anticipated earnings.
Nvidia Graphics Processor Influence
Nvidia’s graphics processors, utilized in personal computers and for the demanding computational operations necessary for artificial intelligence, have long been a favorite of Wood’s. Since the launch of ARK in 2014, she has included shares of the Santa Clara, California-based business with Tesla Inc.
However, ARK’s certainty has occasionally wavered. On August 23, the day before the chipmaker released earnings, the company sold over 300,000 Nvidia shares. That day, the chipmaker’s quarterly revenue prediction fell around $1 billion, not the typical Wall Street estimate. Representatives of ARK did not reply to requests for comment.
Greg Taylor, chief investment officer at Purpose Investments Inc., stated that Nvidia is a high-quality company and that although it was costly earlier this year, the correction has made it look very appealing at these levels.
The shares of Nvidia Corporation stock (NASDAQ: NVDA) rose from $4 at the beginning of 2014 to more than $330 by the end of 2021, when Nvidia’s market worth peaked at more than $800 billion, thanks in large part to Wood’s fondness for the company. The stock, though, has been a significant hindrance this year. The market capitalization of Nvidia Corporation stock (NASDAQ: NVDA) has decreased by nearly $500 billion since its record high on November 29.
Of course, Wood has come under fire since her portfolios have suffered, and the economic downturn has negatively impacted the high-growth, high-priced stocks she prefers to promote. Her flagship $8 billion ARK Innovation ETF has lost 55% of its value this year.
Wall Street has been cutting its earnings forecasts for Nvidia. According to data gathered by Bloomberg, predictions for 2023 profits under generally accepted accounting standards have decreased by more than 50% over the past three months.
Dreamstime © Maxkolmeto
Author Valerie Remorosa