It has been proven that Cathie Wood, the head of ARK Invest and known as the "female version of Buffett," decided to sell off most of Nvidia's holdings when its stock price fell below $150 per share, which was a mistake and came at a high cost.
According to calculations, Mu Jie "perfectly" missed Nvidia's frenzy, and this round of gains could have brought it a return of $1.2 billion. According to the 13F filing submitted to the US Securities and Exchange Commission (SEC), Ark Investment has sold 1.3 million shares of Nvidia stock since the fourth quarter of 2022.
Selling non-stop
It is worth mentioning that most of the selling occurred in November 2022, when the release of ChatGPT ignited market enthusiasm for artificial intelligence, which in turn drove the US stock market to soar. In the fourth quarter of 2022, the average price of Nvidia's stock was about $146, but now it has risen to $1095.95, an increase of 651%.
However, Ark Investment sold 859000 Nvidia shares in the fourth quarter of 2022 alone, earning a shortfall of $854 million.
In February 2023, Mu Jie stated that although she liked Nvidia's stock, its valuation was too high. At that time, Nvidia's market value was approximately $575 billion. Now, its market value is approximately 2.8 trillion US dollars.
"We are optimistic about Nvidia and believe it will be a good stock. It is a very good artificial intelligence company," she said in an interview at the time. "As a flagship fund, our goal is to gain the highest trust, which is partly related to valuation."
However, Mu Jie did not stop her pace of reducing her holdings in NVIDIA: she reduced her holdings by 109000 shares in the first quarter of 2023, 118587 shares in the second quarter of 2023, and a total of 147651 shares in the second half of 2023. Then in the first quarter of 2024, 81239 shares were sold. As of March 31 this year, Ark Investment still holds 67000 Nvidia shares worth approximately $75 million.
Valuation too high
And so far, Mu Jie still does not agree with Nvidia's sky high valuation.
She said in an interview, "Actually, since Nvidia went public, my entire career has been focused on it. This is a very cyclical stock, and over ordering Nvidia GPUs may cause painful inventory adjustments for the company."
"Everyone was excited and trying to enter at the same time, so there were double orders, triple orders, quadruple orders, and then inventory corrections. We believe this situation will happen again," she said.
It is reported that Ark Investment has reallocated the proceeds from selling NVIDIA stocks to other potential artificial intelligence companies, although these investments have not yet received returns.