Cathy Wood Boosts TSM.US Holdings by 87% Amid AI Boom

Cathy Wood, the renowned fund manager known as "Woodstock," has made a significant move by substantially increasing her holdings in Taiwan Semiconductor Manufacturing Company (TSM.US) for the first time in a year. This shift marks a notable change in her investment strategy, as her funds had been consistently reducing their stakes in the company since the third quarter of last year. The decision to increase holdings in TSM.US indicates Wood's renewed confidence in the semiconductor industry, particularly in the context of the burgeoning artificial intelligence (AI) sector.

Wood's flagship fund, ARK Innovation ETF, purchased 123,587 shares of TSM.US American Depositary Receipts (ADRs), while ARK Next Generation Internet ETF acquired 74,189 shares. This move comes at a time when global economic tensions have eased, following a trade truce between the two largest economies. Additionally, a series of AI cooperation agreements between the United States and key Middle Eastern countries have created a favorable outlook for TSM.US, a core supplier to NVIDIA.

Although ARK funds had previously increased their holdings in TSM.US in February, the recent purchase marks the largest since June 18, 2022, equivalent to 87% of the fund's holdings as of March 31. The ADR price of this semiconductor industry bellwether has recovered more than half of its losses from the January peak to the April trough. Analysts predict that the stock price will rise by 11% over the next 12 months.

Despite Wood's reputation for making bold bets on disruptive technologies, her flagship fund has underperformed in recent years. Although the ARK Innovation ETF has seen a cumulative increase of 82% over the past two years, it remains approximately 63% below its historical peak and has underperformed the NASDAQ Composite Index for most of the past five years.

Wood's decision to increase her holdings in TSM.US reflects her continued focus on AI and its potential to drive future growth. By investing in TSM.US, Wood is positioning herself to capitalize on the growing demand for advanced semiconductor solutions in the AI industry. This move underscores her belief in the company's technological capabilities and its strategic importance in the rapidly evolving AI landscape.

In summary, Wood's substantial increase in holdings in TSM.US marks a significant shift in her investment strategy, highlighting her renewed confidence in the semiconductor industry and the AI sector. This move aligns with her long-standing approach of investing in disruptive technologies and positions TSM.US as a key player in the AI revolution. Despite recent underperformance, Wood's investment in TSM.US demonstrates her commitment to identifying and investing in companies at the forefront of technological advancements.