Cathie Wood Says Software Is the Next Big AI Opportunity -- 2 Ark ETFs You'll Want to Buy if She's Right

Core Viewpoint - Cathie Wood predicts that software companies will be the next significant investment opportunity in artificial intelligence (AI), potentially generating $8 in revenue for every dollar spent on chips from suppliers like Nvidia [1]. Group 1: Ark Investment Management and ETFs - Ark Investment Management operates several ETFs focused on innovative technologies, particularly in AI software [1]. - The Ark Innovation ETF (ARKK) and the Ark Autonomous Technology and Robotics ETF (ARKQ) have shown strong returns of 34% and 57% respectively over the last 12 months [2]. - The Ark Innovation ETF is actively managed and primarily invests in "disruptive innovation," which includes technologies that can change how the world operates [3]. - The Ark Innovation ETF holds 34 different stocks, with its top five positions accounting for 43.8% of the total portfolio value, including Tesla, which is viewed as a major AI project due to its full self-driving software [4][5]. Group 2: Performance and Volatility - Despite a strong return of 34% over the last year, the Ark Innovation ETF is still down 60% from its record high in 2021, indicating significant volatility [8]. - The Ark Autonomous Technology and Robotics ETF has a narrower focus on AI, robotics, and automation, with its top five holdings accounting for 45.2% of the total portfolio value [10]. - The Ark Autonomous Technology and Robotics ETF has delivered a compound annual return of 14.8% since its inception in 2014, outperforming the Ark Innovation ETF and the S&P 500 [13]. Group 3: Key Holdings and Technologies - The top holdings in the Ark Innovation ETF include Tesla, Roku, Coinbase, Roblox, and Robinhood Markets, with Tesla being a significant player due to its AI capabilities [9]. - The Ark Autonomous Technology and Robotics ETF includes holdings such as Tesla, Kratos Defense, Teradyne, Rocket Labs, and Archer Aviation, emphasizing the focus on autonomous technologies [10][12]. - Other notable stocks in both ETFs include Palantir Technologies, UiPath, Meta Platforms, Amazon, and Nvidia, highlighting a strong presence in AI software and hardware [6][12].