From Nasdaq: 2024-05-05 06:15:00

Cathie Wood’s Ark Invest funds have gained fame for bold investment calls and forward-thinking strategies. Wood predicted Tesla shares soaring to $4,000 pre-split, which was proven correct in 2020. Wood now believes the Magnificent Seven tech stocks trade is overcrowded, with smaller disruptive innovation stocks poised to outperform, particularly Tesla.

Wood argues that the investor concentration in the Magnificent Seven stocks, excluding Tesla, highlights a trend in the market. Small-cap stocks have underperformed due to interest rate pressure, while the Magnificent Seven continue to garner interest for their strong profit margins and investments in generative AI technology.

Tesla’s upcoming robotaxi day on Aug. 8 could shed light on its autonomous ridesharing program, but the company faces challenges in the EV market. While Wood remains bullish on Tesla, the stock is considered riskier compared to the Magnificent Seven stocks, which have shown resilience in their earnings reports.

Investors weighing a choice between the Magnificent Seven and Tesla may find the former a more appealing option currently. Wood’s intriguing arguments aside, Tesla’s position in the market faces headwinds, while the Magnificent Seven stocks continue to perform well and invest in innovative technologies like generative AI.



Read more at Nasdaq: Forget the “Magnificent Seven”: Cathie Wood Says to Buy This AI Stock Instead