Wood Doubles Down on Nvidia and TSMC Amid Meta Earnings Miss
Cathie Wood's Ark Invest has invested heavily in Nvidia and Taiwan Semiconductor Manufacturing (TSMC) following Meta's earnings miss. The timing of this move suggests that Wood believes AI demand will remain strong.
META recently announced plans to increase its artificial intelligence (AI) capex budget, which is likely to lead to additional orders for Nvidia silicon. As a result, Wood appears to be betting on Nvidia capturing a significant share of Meta's expanding wallet and converting infrastructure spending into revenue growth.
TSMC's latest financial results reflect the linkage between Nvidia's GPU sales and TSMC's manufacturing profit. The company's revenue climbed 36% year over year to $40.2 billion, while net income surged 77.4%. By purchasing TSMC stock alongside Nvidia, Wood is extending the same AI infrastructure thesis one step downstream.
Nvidia currently trades at roughly 25 times forward earnings, which sits well below prior levels witnessed during earlier cycles of the AI revolution. Investors who share Wood's conviction that hyperscaler capex budgets will remain elevated for several more years may find this valuation profile reasonable.