Wood: Software stocks next to benefit from AI boom after Nvidia

Investing.com -- Software providers will be the next businesses to benefit from a spike in interest in artificial technology that has spurred on rapid growth in Nvidia (NASDAQ: NVDA) shares, according to ARK Investment Management chief executive and founder Cathie Wood.

Speaking on Bloomberg TV on Wednesday, Wood said her flagship ARK Innovation ETF (NYSE: ARKK) is on the look-out for software firms that "are actually right now where Nvidia was when we first bought it."

ARKK moved to cut its stake in California-based Nvidia in January, meaning the fund has not been a beneficiary of a rally in the stock that has seen the company's valuation temporarily top $1 trillion. In a tweet earlier this week, Wood defended the decision, arguing that Nvidia shares are "priced ahead of the curve."

For now, Wood said she will turn her attention to AI-related software players, including New York-based UiPath (NYSE: PATH), San Francisco-based Twilio (NYSE: TWLO), and telehealth group Teladoc (NYSE: TDOC). All of these firms have seen their shares fall sharply in recent months.

“For every dollar of hardware that Nvidia sells, software providers, SaaS providers will generate 8 dollars in revenue,” Wood noted in the Bloomberg interview.

Meanwhile, Wood predicted that Tesla (NASDAQ: TSLA) will be a major "artificial intelligence play" in the coming years. She said she believes the electric carmaker's stock price will climb to $2,000 in 2027 from its Tuesday close of $201.16 as demand grows for autonomous technology.

Even without this driver, Wood said a "massive shift" toward electric vehicles would bring the shares up to at least $400.

You May Also Be Interested In

• Dataram (DRAM) call put ratio 1.4 calls to 1 put into SK Hynix plans to raise up to $29B
• Citi Adds Qualcomm (QCOM) to 30-Day Downside Catalyst Watch List
• Provenance Gold Intersects 1.82 g/t Gold over 116.74m Including 8.31 g/t Gold over 12.34m at Eldorado West