Cathie Wood steered clear of Arm IPO frenzy because there was ‘too much emphasis on AI’

Cathie Wood, the CEO of ARK Invest, has expressed her belief that Arm, the UK chip designer that recently had the biggest IPO of the year, is overvalued. Despite the company's shares rising 25% on their first day of trading, Wood did not participate in the IPO, stating that there was too much emphasis on AI and not enough on competitive dynamics. She also compared Arm's high valuation to other stocks in ARK's portfolio that are lower priced with more exposure to AI.

Since its debut, Arm's shares have lost around 13% of their value. ARK Invest has also been cautious with Nvidia, another AI semiconductor stock, and sold its shares in January. Despite this, Nvidia's stock has rallied, gaining more than 200% since the start of the year and joining the trillion-dollar club. Nvidia had planned to acquire Arm in a $40 billion deal, but the takeover collapsed due to regulatory pressure.

Key takeaways:

ARK Invest CEO Cathie Wood did not participate in Arm's IPO, stating that the company was overvalued.
Arm, a U.K. chip designer, had a blockbuster IPO on Nasdaq, valuing it at $55 billion, making it the biggest IPO of the year.
Since its first day on Nasdaq, Arm's shares have lost around 13% of their value.
ARK Invest has also been cautious about Nvidia, despite the company's significant growth and entry into the trillion-dollar club.

Cathie Wood steered clear of Arm IPO frenzy because there was ‘too much emphasis on AI’

Key takeaways:

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