Artificial intelligence has swiftly entered the common vocabulary of most investors, a trend that hasn’t escaped the attention of Cathie Wood, the visionary behind Ark Invest. Wood’s involvement with Nvidia Corp (NASDAQ:NVDA) dates back to at least 2016, and according to her, the AI trade still holds great promise. In fact, she believes that AI adoption will extend to a vast majority of companies sooner than anticipated.
In an exclusive interview set to air on “The Raz Report” at 2 p.m. ET on Wednesday, August 30, Benzinga CEO Jason Raznick engages Wood with a question that’s on many minds: “Has the ship sailed on AI stock investments?”
Wood’s response is an unequivocal “No.” She believes that any company armed with “proprietary data, domain expertise in their own business, as well as AI proficiency” can harness AI to enhance their competitive edge. As a prime example, she points to Twilio Inc (NYSE:TWLO).
Highlighting Twilio’s impressive feat of facilitating over a trillion interactions between consumers and businesses annually, Wood emphasizes the platform’s growth trajectory. While Nvidia trades at approximately 25 times this year’s revenue, Twilio boasts a significantly lower multiple of just 2.5 times. Wood views Twilio’s modest valuation as an enticing investment prospect, underlining the company’s march towards cash flow profitability. Notably, Twilio’s promising margins are poised to ascend as the incorporation of AI deepens its operational framework.
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Wood also delves into the merits of UiPath Inc (NYSE:PATH), a specialist in robotic process automation. Drawing attention to UiPath’s capacity to streamline business workflows through AI, she envisions the potential to slash global knowledge worker expenses by up to 50%.
As an advocate of technology’s role as a net job generator, Wood acknowledges that while AI’s initial integration might trigger workforce reshuffling in various sectors, novel job avenues will also emerge, defying current imagination.
In the rapidly evolving landscape, AI’s influence spans multiple sectors, encompassing financial giants like Moody’s Corp (NYSE:MCO) and Discover Financial Services (NYSE:DFS), alongside trailblazers like Twilio and UIPath. This dynamism implies that investors may need to recalibrate conventional valuation frameworks, acknowledging AI’s transformative prowess.
Wood’s message resonates strongly: the scope of AI investment transcends the stocks themselves, encouraging a holistic comprehension of AI’s potential to revolutionize the very essence of established enterprises.