Cathie Wood’s ARK sold Tesla and bought Nvidia shares in three of its exchange-traded funds on Thursday.
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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 allen.root@dowjones.com