Ark Invest's Cathie Wood her crew are inventive investors. They don't usually buy in conventional stocks, but they always look five years ahead for big gains. Wood is a pioneer in AI investment. Ark Invest's favorite AI stock? Answers may surprise you.
Coinbase, Global, Tesla, Roku, UiPath, Robinhood Markets, Roblox, Draftking
Top Ark holder UiPath Ark Invest gives investors daily holdings updates, so "put your money where your mouth is" applies. Ark's lack of "big name" AI stocks is notable. Ark's top 10 lacks Nvidia, Super Micro Computer, and Palantir Technologies.
Tesla and UiPath are the only true AI companies in the top 10. Tesla is mostly an electric vehicle maker, but it heavily uses AI. UiPath is Wood's #1 AI pick, and it's good. RPA software from UiPath helps anyone automate operations. While not AI, this technology works well with AI to automate more tasks with UiPath.
When a company uses UiPath's products, people may think creatively. Employee morale and productivity rise. UiPath's financials reflect its software's value. Its net revenue retention rate was 119% in the fourth quarter of fiscal year 2024 (ending January 2024), meaning clients spent $119 for every $100 they spent last year. Wood and Ark may be high on UiPath shares since existing customers are using it more, proving its quality.
Peers charge substantially more than UiPath. Q4 ARR for UiPath was $1.46 billion, up 22% year over year, and the company guided for 18% growth in fiscal year 2025. After the results announcement, the stock fell 8% because the market wanted more.
This is a wonderful purchasing opportunity because UiPath's long-term strategy is still positive and short-term market emotion shouldn't influence investors.
The company trades for 10.5 times revenue, which is a good buy considering that many AI-related software stocks price for over 20 times sales. UiPath is a great investment right now since it's successful in its core competency, trading at a decent price, and backed by a visionary tech investor.
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