Ark Invest’s Cathie Wood doubled down on the artificial intelligence boom, purchasing shares of multiple Magnificent 7 and Chinese AI stocks in Q3 despite Wall Street concerns over an AI bubble, as megacap tech valuations remain stretched.
Contrarian Bets in Disruptive Technology
Wood is known for her contrarian approach, investing heavily in disruptive technologies. In Q3, she made notable purchases in the so-called Mag 7 — the largest US tech stocks — and Chinese AI firms. Meanwhile, some hedge fund managers, such as Michael Burry, placed large bets against Nvidia and Palantir Technologies, citing concerns over an AI bubble.
Burry, who had stayed silent for two years, warned of a potential bubble on X, while Ray Dalio of Bridgewater Associates echoed similar concerns. Dalio noted that approximately 80% of recent market gains were concentrated in big tech stocks, raising questions about market sustainability.
Significant Increases in US Tech Holdings
According to a 13F-HR filing with the US Securities and Exchange Commission, Ark Invest increased its stake in the following Mag 7 stocks:
- Alphabet Class C (Nasdaq:GOOG): 205,190 shares, valued at $43.1 million (£32.8 million), a 153.3% increase
- Tesla (Nasdaq:TSLA): 512,160 shares, valued at $195.2 million (£148.7 million), up 16.6%
- Nvidia (Nasdaq:NVDA): 152,610 shares, valued at $26.2 million (£19.9 million), up 15%
- Amazon (Nasdaq:AMZN): 78,110 shares, valued at $17.1 million (£13 million), an increase of 6.8%
Despite recent volatility caused by US tariffs, supply chain disruptions, and geopolitical tensions, these stocks have posted double-digit gains over the past six months.
New additions: Pony AI and Chinese giants
In addition to US tech stocks, Ark Invest expanded its exposure to AI and Chinese technology firms.
Pony AI (Nasdaq: PONY): The firm purchased over 1.2 million shares for $22.6 million (£17.2 million). Despite a 9.2% decline YTD, Pony AI claims to have accumulated over 21 million kilometres of autonomous driving data. It recently announced the rollout of its 300th ARCFOX Alpha T5 Robotaxi, aiming to operate a fleet of 1,000 vehicles in Beijing and Shenzhen by the end of 2025. The company is also expanding internationally, partnering with Stellantis to develop Level 4 autonomous vehicles for Europe. Pony AI is considering an IPO in Hong Kong to fund further R&D.
Alibaba (NYSE:BABA): Ark Invest bought 210,180 shares worth $30.7 million (£23.3 million), reflecting confidence in China‘s e-commerce and AI growth. Alibaba’s shares have surged 87.7% YTD, driven by aggressive AI integration.
Baidu (Nasdaq:BIDU): The firm acquired 213,940 shares for $23.2 million (£17.6 million), increasing its stake by 72%. Baidu, often called the ‘Google of China’, recently unveiled its M100 and M300 AI chips; the shares rose nearly 4% in Thursday premarket trading after the announcement. These chips are designed to provide Chinese companies with affordable, high-performance computing power amid ongoing US-China tech tensions. They are expected to launch over the next two years, supporting China‘s ambitions in AI development.
Looking Ahead
Cathie Wood’s latest moves highlight her confidence in AI and big tech, despite broader market concerns. Her strategic investments reflect a bullish stance on the continued growth of AI technology and its integration into global markets. As the sector faces regulatory, geopolitical, and valuation challenges, Wood’s contrarian approach suggests she remains optimistic about the long-term potential of these disruptive innovations.
Disclaimer: Our digital media content is for informational purposes only and not investment advice. Please conduct your own analysis or seek professional advice before investing. Remember, investments are subject to market risks and past performance doesn’t indicate future returns.
Originally published on IBTimes UK