Cathie Wood and the Ark Invest team are known as some of the most innovative investors. Although they don’t always invest in mainstream stocks, they always look at least five years ahead to identify stocks with significant upside potential.
One of the trends sweeping the investment world is artificial intelligence (AI), and Wood has been at the forefront of that movement. So what are Ark Invest’s favorite AI stocks? The answer may surprise you.
UiPath is a head of Ark Holdings
The old adage “put your money where your mouth is” is true, and fortunately, Ark Invest provides investors with daily updates on their holdings.
| rank | company | Portfolio weight |
|---|---|---|
| 1 | coinbase global | 8.33% |
| 2 | block (Formerly known as Square) | 6.05% |
| 3 | tesla | 5.67% |
| Four | Roku | 5.52% |
| Five | UiPath (path 1.36%) | 5.2% |
| 6 | CRISPR Therapeutics | 4.12% |
| 7 | robinhood market | 3.64% |
| 8 | Zoom video communication | 3.16% |
| 9 | roblox | 3.04% |
| Ten | draft kings | 2.84% |
Data source: Ark Invest. Weight as of March 19th.
One thing that stands out is that Ark doesn’t own a ton of “big name” AI stocks. Nvidia, super microcomputerand Palantir Technologies are all outside of Ark’s top 10.
If you look at each company in the top 10, the only real AI businesses are Tesla and UiPath. Although Tesla is aiming for AI and uses the technology heavily, it remains the dominant electric car maker. So Wood’s top choice for his AI was UiPath, and it was a good one.
UiPath specializes in Robotic Process Automation (RPA) and is a useful software for anyone looking to automate their processes. Although this is not an AI technology per se, it works well with AI as it expands the amount of tasks that his UiPath can automate.
When companies implement UiPath’s products, their employees are free to perform tasks that require independent thinking. This increases productivity and employee morale.
The utility of UiPath’s software is largely reflected in its financial aspects. Net revenue retention for the fourth quarter of fiscal 2024 (ending January 2024) was 119%. This shows that a customer spent $119 for every $100 he spent last year. Existing customers are increasing their use of his UiPath products, which shows how good UiPath’s programs are and is likely why Wood and Ark’s stock prices are so high.
But it’s still a bargain.
UiPath is much cheaper than other products
UiPath’s annual recurring revenue (ARR) increased 22% year over year to $1.46 billion in the fourth quarter, and the company was targeting 18% ARR growth in fiscal 2025. However, the market was hoping for more growth, and the stock fell 8% after the earnings report.
This represents a great buying opportunity, as UiPath’s long-term strategy remains positive and short-term market sentiment should not dictate investors’ long-term opinions.
PATH PS Ratio data by YCharts
The company’s stock trades at an attractive 10.5 times sales, making it a solid buy, especially considering that many AI-related software stocks trade at more than 20 times sales. appear.
UiPath has been successful on its core competencies, is trading at a good price for investors, and is backed by one of the most forward-thinking tech investors, so this stock looks like a great buy right now. It looks like
Keithen Drury has held positions at Block, Tesla, and UiPath. The Motley Fool has positions in and recommends Block, CRISPR Therapeutics, Coinbase Global, Nvidia, Palantir Technologies, Roblox, Roku, Tesla, UiPath, and Zoom Video Communications. The Motley Fool has a disclosure policy.
