Morning Wood: ARK Trims Nvidia Stake Further, Cuts TSMC Position

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by Tyler Durden
Monday, Feb 26, 2024 - 04:45 PM

The main question on investors minds right now is when the euphoria in AI stocks is going to lose steam. 

ARK's Cathie Wood isn't waiting around for an answer. The investment manager, who has been long Nvidia since it traded in single digits, continues to trim her stake in the name while at the same time lightning up on shares of Taiwan Semiconductor Manufacturing.

Her sales of TSMC are the first such sales she has made is more than two years, according to Bloomberg/Yahoo. Those sales are another way to trim the firm's exposure to Nvidia, which is a key customer of TSMC, the report says. 

Wood sold 8,599 American depositary receipts of TSMC from its Ark Autonomous Technology and Robotics ETF. On the same day, the same ETF also sold 2,362 shares of Nvidia, according to Bloomberg data. 

The scaling back of ARK's investments in major semiconductor companies comes amidst continued excitement over artificial intelligence in the market, notably after Nvidia's significant earnings beat out just days ago.

Nvidia has seen a 59% increase this year, while TSMC's ADRs have climbed 25%, Bloomberg notes. Ark funds acquired TSMC shares several times in 2023, holding around 221,848 shares in total.

Wood, a vocal advocate for AI's impact as a part of her "innovation" tagline has reallocated investments from these tech giants to emerging software firms like UiPath and Twilio, moving away from the surge that elevated Nvidia's value to nearly $2 trillion.

TSMC and Nvidia are no longer among the top 10 holdings of her autonomous ETF, which emphasizes industrial innovation.

Could Wood be timing a market top correctly?