Cathie Wood did not participate in Arm’s IPO: here’s why

Cathie Wood – the Founder and Chief Executive of Ark Invest chose to sit on the sidelines as Arm Holdings plc (NASDAQ: ARM) debuted on Nasdaq last week.

Wood sees Arm stock as overvalued

Wood has been a staunch supporter of artificial intelligence which she sees as an innovation that can unlock countless opportunities moving forward.

Still, the influential investor finds Arm Holdings a bit overvalued on a relative basis and that’s why she did not participate in its recent IPO.

As far as Arm, I think there might be a little bit too much emphasis on AI when it comes to Arm and maybe not enough focus on the competitive dynamics out there.

Shares of the chip designer have pared almost all of their post offering gains and are returning quickly to the IPO price.

Wood already has exposure to AI names

Wood also told CNBC this morning that she already has AI names in her portfolio that are much more appropriately valued.

One of her top picks for exposure to artificial intelligence remains Tesla Inc that she’s convinced will be a $2,000 stock in less than five years.

It is worth mentioning here that Arm Holdings actually saw its revenue slide 1.0% in the twelve months to March 31^st. The British firm has not officially responded to Wood’s remarks so far.

Other notable names that are not overly excited about Arm include the hedge fund manager Dan Niles – who also recently picked Nvidia over Arm Holdings to play the AI space as Invezz reported here.