ARKK Needs To Turn AI Hype Into Profitability
Generative AI takes center stage as ARK Invest released its "Big Ideas 2023" research piece.
ARK believes that "five innovation platforms are converging to create unprecedented growth trajectories," with AI as the "most important catalyst." Notably, it believes that by 2030, "the market value of disruptive innovation could represent the majority of the global equity market capitalization."
ARK believes that "five innovation platforms are converging to create unprecedented growth trajectories," with AI as the "most important catalyst." Notably, it believes that by 2030, "the market value of disruptive innovation could represent the majority of the global equity market capitalization."
Companies that ARK believes are capitalizing on disruptive innovation and developing technologies to displace older technologies or create new markets may not in fact do so. - ARK's Big Ideas 2023
Keen investors should note that AI has always been an underlying theme underpinning ARK's thesis (but not necessarily profitability). With $Microsoft (MSFT.US)$ investing a further $10B in OpenAI recently at a reported 100x projected revenue, it has also driven risk-on bets, as seen in the surge in ARKK.
ARK accentuated that the companies within its portfolio have a strong "proprietary AI" foundation, enabling them to capitalize on their data edge.
Why? Because ARK believes that over time, the cost of training complex AI models will drive down AI training costs by "70% at an annual rate through 2030."
ARK accentuated that the companies within its portfolio have a strong "proprietary AI" foundation, enabling them to capitalize on their data edge.
Why? Because ARK believes that over time, the cost of training complex AI models will drive down AI training costs by "70% at an annual rate through 2030."
$ARK Innovation ETF (ARKK.US)$ has outperformed the $S&P 500 Index (.SPX.US)$ recently, as AI-mania could surpass even the feverish Web3 excitement of 2021.Innovation is complex, but the hype does seem more real than the Web3 hype in 2021. With ARKK's companies in the early stages of their profitability ramp, we believe the hype is critical to lifting investors' sentiments. But, investors still need to separate hype from reality, as many AI-first companies might not move successfully to commercialization.
Will ARKK seize the moment and bounce back from its two-year slump, capitalizing on the ChatGPT buzz?
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