• NVIDIA with weaker revenue guidance
• Cathie Wood repurchases NVIDIA shares
• Hope in US law
NVIDIA stock under pressure after sales warning
Things aren’t going too well for NVIDIA stock right now. The stock on the NASDAQ has already suffered significant losses since the beginning of the year due to the generally weak environment for technology-heavy stocks. The recent announcement that the chipmaker was trimming its revenue guidance for the second quarter of 2022 caused an additional sell-off. Despite the weak performance of the tech title, the majority of analysts are sticking with the company.
ARK CEO Cathie Wood reorders NVIDIA shares
Cathie Wood, CEO of ARK Invest, is also likely to be among NVIDIA’s supporters. The investor used the price weakness of the NVIDIA shares after the adjusted sales outlook to expand their ETFs with additional positions. On August 8, 2022, the same day that NVIDIA announced the news, the ARK boss bought a total of 366,982 shares in the chip group. 289,229 shares alone flowed into Wood’s flagship fund ARK Innovation ETF (ARKK), which contains shares in companies that are “relevant to the fund’s investment theme – disruptive innovation -” according to ARK. The fund’s largest positions include Tesla, Zoom, and Roku. NVIDIA shares are now in 24th place with a share of 742,967 shares.
But other ARK ETFs also received NVIDIA shares at a bargain price: The ARK Next Generation Internet ETF was increased by 47,069 shares to 151,645 shares on the same day, while the ARK Fintech Innovation ETF was supplemented by 30,684 shares to a total of 83,488.
US chip law could drive NVIDIA
This means that Wood could not have ordered the NVIDIA shares only because of the low purchase price, as “Forbes” writes. The US Congress passed the “CHIPS and Science Act” at the end of July, which is intended to support the US chip industry with a package worth 280 billion US dollars. With regard to the smoldering trade dispute between the USA and China, which became even more explosive in the context of the China-Taiwan conflict and the visit to the island state by US Democrat Nancy Pelosi at the beginning of August, the world’s largest economic power wants to break away from its dependency on semiconductors dissolve the People’s Republic. On August 9, 2022, US President Joe Biden signed the bill to allow investment in “research and development, science and technology, and the workforce of the future,” the White House said in a press release. This could indicate that Cathie Wood expects NVIDIA to get a boost from the new chip law.
ARK stocks should rally again after recession and bear market
Most recently, the star investor was increasingly criticized for her investment decisions. While the growth stocks in the ARK ETFs, which are considered innovative, rose significantly at the beginning of the corona pandemic, a countermovement set in in 2021. With the recent downtrend for tech stocks, Wood’s favorites like Zoom and Teladoc are also clearly suffering. However, the market size recently explained to “CNBC” that this was due to the current economic situation. “We’ve been predicting a recession for some time, based in large part on excess inventories,” Wood said in an interview on The Tech Trade show. “We believe this is an inventory driven recession and it’s showing itself loud and clear.”
However, the ARK portfolio should improve as soon as the recession is over. “Typically, growth stocks will do better at the end of a bear market and recession because they represent new leadership,” Wood continued. “As inflation and interest rates rose, we faced incredible headwinds. It started in February 2021. So far, it looks like we’ve bottomed out.”
Editorial office finanzen.net
Leverage must be between 2 and 20
No data
More news about NVIDIA Corp.
Image credits: Cindy Ord/Getty Images for Bloomberg Businessweek, michelmond / Shutterstock.com