Identifying how technological change is going to play out is a tricky business. Cathie Wood’s Ark Innovation ETF (US:ARKK) is invested in some of the most speculative technology companies on earth. Since 2014, it has held a position in graphics processing unit (GPU) designer Nvidia (US:NVDA). When it took that position, GPUs were a novel technology used in computers for gaming. The idea that they could one day drive a potential AI revolution was on few people's minds.
In 2023, many people believe that AI revolution has arrived. Nvidia’s share price has more than doubled in six months and it is the talk of the market. The problem for Wood is she has missed out on most of these gains. In November, Ark sold 95 per cent of its $96mn (£76mn) stake, before selling its remaining shares in January.