Cathie Wood Trades Tesla Stock for Nvidia After the Chip Maker’s Tough Day

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Cathie Wood seems to have used

Nvidia
’s
tough day to buy more stock in the graphics chip giant. She sold some of her

Tesla

stake to buy the

Nvidia

shares.

Nvidia

(ticker: NVDA) stock dropped 7.7% on Thursday after the company disclosed new licensing requirements for selling advanced semiconductors to China imposed by the U.S. government.

Nvidia has said up to $400 million in third-quarter sales were at risk. Wall Street projects $5.9 billion in third-quarter sales. The sales impact, however, isn’t the main reason the stock dropped. The new requirements are just another example of increasing tensions between the U.S. and China.

Wood doesn’t seem all that worried though. The

ARK Innovation ETF
(ARKK) bought almost $32 million in Nvidia stock on Thursday. The fund also added about $9 million, combined, in

Exact Sciences

(EXAS),

Ginkgo Bioworks

(DNA) and

Teladoc

(TDOC).

Wood funded the sales mainly with

Tesla

(TSLA) stock, selling about $32 million worth of shares. The ARK innovation fund also sold about $9 million worth of

Compugen

(CGEN) and

Signify Health

(SGFY).

Similar trades were also made in the

ARK Autonomous Technology & Robotics
ETF (ARKQ) and the

ARK Next Generation Internet ETF
(ARKW).

ARK wasn’t immediately available to comment on the reason for the buys and sells and if the similar size of the Tesla and Nvidia trades was a coincidence.

For the flagship Innovation fund, the 115,168 shares of Tesla sold represents about 4% of the total Tesla stock held. Tesla should still be the largest position in the ARK Innovation ETF after the sale.

The Nvidia buy represents more than a 30% increase in the Innovation fund’s holdings. It’s a big increase, but Nvidia should still be outside of the top 20 holdings after the purchase.

The ARK Innovation ETF tends to focus on the highest-growth stocks in any given sector. Growth stocks have had a tough year given rising interest rates. Through Thursday, the Innovation fund has fallen about 56% this year, while the

Nasdaq Composite
has declined about 25%.

Tesla stock has been a relative outperformer for the fund. Shares have declined about 21% in 2022. Nvidia shares, on the other hand, have dropped about 53%.

Write to Al Root at [email protected]