Cathie Wood’s ARK Invest Missed Over $1 Billion in Return by Selling Nvidia Stock Too Early

• Cathie Wood’s decision to sell more than 1 million shares of Nvidia came as the stock reached astronomical highs.

• Ark Invest missed out on over $1 billion in returns by selling Nvidia stock too early.

• Ark Invest sold 859,000 shares of Nvidia stock in the fourth quarter of 2022, when the stock was trading below $150 per share.

Cathie Wood’s decision to sell most of Ark Invest’s shares Nvidia holdings when the stock was trading below $150 per share proved costly.

To put a number on it, the popular money management company was left out of a rally that would have brought it a return of $1.2 billion, according to Business Insider calculations.

According to 13F filings with the Securities and Exchange Commission, Ark Invest has sold 1.3 million shares of Nvidia in its investment product line since the fourth quarter of 2022.

The bulk of these sales occurred in November 2022, before the release of ChatGPT helped spark a massive AI-fueled rally in the stock market.

Nvidia stock traded at an average price of around $146 in the fourth quarter of 2022. The stock has since soared 682% to around $1,141 as of Thursday afternoon.

Ark Invest’s decision to sell 859,000 shares of Nvidia stock in the fourth quarter of 2022 alone cost the disruptive, innovation-driven investment firm $854 million in missed returns had it held on to the shares.

In February 2023, Wood told CNBC that while she likes Nvidia stock, their valuation was too high.

“We like Nvidia, we think it will be a good stock. Its price is the AI ​​company to check the box. For a flagship fund, where we are consolidated around our most convinced names, some of that has to look at valuation,” she told CNBC at the time.

Nvidia had a market valuation of around $575 billion as of February 2023. Today, Nvidia is worth around $2.8 trillion.

ARK Invest continued to sell its stake in Nvidia, liquidating 109,000 shares in the first quarter of 2023, 118,587 shares in the second quarter of 2023, and a total of 147,651 shares in the second half of 2023.

In the first quarter of 2024, ARK Invest continued to reduce its stake in Nvidia, selling 81,239 shares. As of March 31, ARK Invest still owns 67,000 shares of Nvidia worth approximately $75 million.

ARK Invest first acquired its stake in Nvidia in the fourth quarter of 2016 at an estimated average price of around $81, according to Stockcircle data.

In an interview with the Wall Street Journal earlier this year, Wood said she still disagrees with Nvidia’s sky-high valuation.

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“I’ve actually followed Nvidia my whole career, ever since it went public. It’s a very cyclical stock,” Wood said, adding that an excessive order of GPUs from Nvidia could create a painful correction in stocks for…