July 18, 2024

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Cathie Wood Says Software Is the Next Big AI Opportunity — 2 Super Stocks You’ll Wish You’d Bought Today if She’s Right

2 min read

Ark Investment Management operates eight exchange-traded funds (ETFs) that invest primarily in innovative technology stocks. Last year, Ark CEO Cathie Wood said software companies will be the next big opportunity in artificial intelligence (AI), predicting they could generate $8 in revenue for every $1 spent on chips from suppliers like Nvidia.

Ark’s ETFs reflect that stance. Tesla stock is the largest holding in the flagship Ark Innovation ETF because Wood has called its self-driving software the biggest AI opportunity in the world. Plus, Wood recently acquired stakes in leading AI software companies like OpenAI, Anthropic, and Elon Musk’s xAI through the Ark Venture Fund.

If Wood is right about AI software, several stocks could be set for substantial gains in the coming years. Here’s why Amazon (NASDAQ: AMZN) and Duolingo (NASDAQ: DUOL) might be among them.

1. Amazon: AI software is just the start

Amazon is one of the most versatile AI stocks investors can buy. It’s weaving the technology into many of its existing businesses, from e-commerce to streaming, and its Amazon Web Services (AWS) cloud division is developing everything from AI chips to AI chatbots.

Amazon uses AI to power the recommendation engine on Amazon.com. It learns what products customers like to buy so it can promote more of them to drive sales. Plus, the company developed a suite of AI software tools for sellers, which helps them craft product descriptions and create more engaging ads to increase conversions.

But Amazon Web Services (AWS) is the beating heart of Amazon’s AI ambitions. It designed its own data center chips for training and inferencing AI models, and they have become popular with developers because they can reduce costs up to 50% compared to Amazon’s other infrastructure (which is powered by Nvidia’s more expensive chips, for example).

Then, there is Amazon Bedrock, where developers can access a suite of ready-made large language models (LLMs) in the cloud from leading start-ups like…

2024-06-22 17:00:00

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