Top NVIDIA Stock Market Investor Says Rally Won’t Last

(CTN News) – If something rises up, it must come down, right? A famous investor who avoided Nvidia’s skyrocketing stock price is cautioning investors to be prepared for a potential decline in the stock price of the AI chipmaker.

According to Ark Invest founder Cathie Wood in a market commentary published Thursday, the rest of the computer chip industry is catching up to Nvidia, which has been the leading supplier of intense computing needed for image generators, chatbots, and everything else threatening to replace your position in the artificial intelligence sector.

An exchange-traded fund known for its technology focus, Ark Invest, exited Nvidia in January 2023, after the company had lost more than half its then-peak value.

However, it coincided with the launch of ChatGPT a few months earlier. Nvidia shares have increased by more than 300% since Ark’s exit. The remarks of Woods come at a time when several insiders are taking advantage of the situation to cash out to the tune of millions of dollars.

The launch of ChatGPT in November 2022 has fueled several quarters of unprecedented growth for Nvidia as cloud service providers, other consumer internet companies, and well-funded startups have scrambled – ordering GPUs in the process – to acquire Nvidia’s hardware and train AI models.

What is the purpose of famine?

Nevertheless, Nvidia is expanding massively to meet the demands for those chips, and wait times are decreasing. Meanwhile, the industry is seeking other sources of funding: OpenAI’s founder Sam Altman is seeking to raise trillions of dollars for the development of computer chips.

It has been reported that Microsoft is producing its own chips. As are Google, Amazon, and Meta. According to Wood, who made her reputation investing in companies such as Tesla and bitcoin at an early stage, the electric vehicle manufacturer is also developing its own chips. The combination of all those competitors could pose a serious threat to Nvidia’s business.

As long as software revenue does not explode to justify the overbuilding of GPU capacity, we would not be surprised to see a pause in spending, compounded by a correction in excess inventories,” Wood writes.

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