Cathie Wood Drops Nvidia, Buys Zoom -- Should You?
On August 23, 2022, Cathie Wood's ARK Invest added over 839,000 shares of Zoom Video Communications (NASDAQ: ZM) to two of its funds, including the company's staple ARK Innovation ETF. The company subsequently sold off 293,600 shares of Nvidia (NASDAQ: NVDA).
This came one day after Zoom reported its second-quarter earnings on August 22 and just a day before Nvidia's earnings (reported on August 24). Should you follow in Wood's footsteps and ditch your shares of Nvidia and buy Zoom instead? Here's why long-term investors might want to think otherwise.
One of the probable reasons Wood made this decision was simply the disparity between valuations for both companies. While both companies have fallen significantly this year -- both have plunged more than 44% year to date -- Nvidia is much more expensive. The semiconductor company trades at a staggering 53 times earnings, while Zoom trades at only 25 times.
Source Fool.com
