What happened
One of the most active and influential stock pickers on the scene, Cathie Wood of exchange-traded fund (ETF) manager extraordinaire Ark Investment, clearly liked what she saw with UiPath (PATH -0.54%) this week.
On Thursday, Ark's after-hours trading digest revealed it purchased a total of 5 million shares of the artificial intelligence (AI) stock. This buy was spread across all of the firm's market-listed ETFs, a rare occurrence. Investors reacted by trading UiPath stock up by nearly 8% on the day, blowing past the S&P 500 index's 1.3% gain.
So what
Wood and company were likely pouncing on a rare opportunity with UiPath.
With the current AI investment craze in full swing, it's tough to find bargains, and UiPath has typically been on an upward trajectory. That reversed briefly on Thursday, as a demanding market reacted negatively to the guidance proffered in the company's first-quarter results. This was despite strong growth numbers, and beats on both the top and bottom lines.
Wood was clearly eager to get UiPath on the Ark, given the bargain opportunity. In what's a notable event, all six listed Ark ETFs bought stock, ranging from Ark Innovation ETF's more than 3.1 million share play, to Ark Space Exploration & Innovation ETF's just under 91,000 share buy.
Now what
While there's surely a fair amount of comfort and security investing along with a market rock star, no one is infallible and we should always temper this with our own judgement and research. That, compounded with the frenzy that's currently swirling around AI stocks like UiPath, warrants caution; only invest if you feel the potential of such companies makes them worth their frequently ballooning valuations.
