Love it or hate it, tech investing is back on the menu in 2023. As a result, Cathie Wood’s back in the limelight. Taking a back seat to the bear market last year, Wood’s Ark Invest has been subjected to much scrutiny for its high-risk, high-reward investing style. But with investors ready to get speculative once again, they’re heeding Wood’s keen analysis on tech once again. Like most investors in recent weeks, Ark and Wood are descending heavily on the artificial intelligence (AI) sector. Wood’s choice in AI stocks could certainly be some of the top performers when all is said and done.
AI has blown the doors off of the tech industry. Of course, it has been around for a long time now — decades, in fact. But in the latter half of 2022, AI caught fire similarly to the blockchain explosion in early 2021. This hype comes thanks to the stock market seeing slight recovery from last year’s downturn, making room for excitement in new speculative investment. The excitement is in turn charging up AI stocks with millions of dollars in new money.
Wood’s Ark Invest recently published its 2023 edition of its Big Ideas report. AI played no small part of this year’s report, naturally. Ark argues on behalf of AI’s seemingly endless use-cases. And, the decreasing costs to train AI models as evidence that the industry will continue to thrive in the coming years. And of the many tech stocks lining Wood’s balance sheet, there are five which investors would do well to keep aware of:
- C3.ai (NYSE:AI)
- UiPath (NYSE:PATH)
- Exact Sciences (NASDAQ:EXAS)
- Upstart (NASDAQ:UPST)
- Tesla (NASDAQ:TSLA)
The AI Stocks Cathie Wood Thinks Will Lead 2023
Cathie Wood’s top AI stocks for the rest of the year are both a bit expected and surprising. It’s perhaps the stock Wood is not betting on that’s most surprising — Nvidia (NASDAQ:NVDA). Indeed, Ark Invest has been slowly but surely offloading its NVDA shares, and collecting quite the bag along the way with an impressive return-on-investment. Given NVDA’s spotlight in the AI space right now, the move comes as unorthodox. But, there are plenty of others receiving a more bullish treatment by the firm.
As InvestorPlace’s Muslim Farooque points out, Ark holds significant amounts of stock in companies C3.ai, Upstart and UiPath. These are some of the most obvious of AI picks on the market. C3.ai’s AI stock remains one of Wall Street’s flagship AI players, offering software-as-a-service (SaaS) to companies who want to employ AI tech at scale for any number of reasons.
C3.ai counts among its clients the likes of oil companies, the U.S. military and multiple defense contractors, giving the company plenty of credibility around its model. UiPath works to similar ends, creating software for clients meant to help streamline various processes. Though, it works specifically in the niche of automating manual tasks with robotics.
These are very broad and promising businesses. But, Ark has also honed in on several companies with more specific goals in mind. Take, Upstart and its UPST stock, for example. The corporation uses AI technology in the field of credit assessment, automating the process of evaluating customers’ creditworthiness. Or, take Exact Sciences — a company which Wood’s firm has recently deepened its holding in. Exact aggregates data to more accurately detect and diagnose cancer in patients.
And while it’s no stranger to most investors, Wood has also held Tesla in high regard, calling Elon Musk’s EV giant a “hidden gem” among AI plays. Wood says TSLA stock — the largest Ark holding at more than 8% of the company’s aggregate portfolio — will be the biggest winner in AI and the most “go-to service” if it can perfect self-automated driving technology.
On the date of publication, Brenden Rearick did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
