Hello Robert,

Shares of Nvidia traded up ~24% on Thursday after the company reported¹ fiscal first-quarter earnings. Although revenue growth declined 13% on a year-over-year basis, it increased sequentially and was higher than expected thanks to record Data Center revenue. The showstopper in the report was guidance for second-quarter revenue of $11 billion, leaps ahead of the $7.11 billion consensus expectation, pointing to year-over-year growth of 63%. In our view, as a provider of accelerated computing hardware used in training and inferencing large language models, Nvidia is likely to be a direct beneficiary of the explosion in interest in generative artificial intelligence (AI) that OpenAI’s ChatGPT ignited. The company should benefit further from sequential growth in its Gaming segment now that an inventory build-up in the channel has eased. Looking ahead, we expect the explosion in AI hardware demand to cause accelerated revenue growth for software companies well-positioned to leverage their proprietary data/distribution advantages and deploy AI use cases across their product lines.

[1] Nvidia. 2023. “NVIDIA Announces Financial Results For First Quarter Fiscal 2024.”

Shares of AeroVironment Inc. traded down ~15% on Thursday after news² broke that the Defense Department eliminated the company from the next phase of its Future Tactical Unmanned Aircraft System (FTUAS) program, for which it previously had been selected³ to build a prototype. AeroVironment has confirmed⁴ that this outcome does not have a material impact on its near-term outlook. AeroVironment provides small and medium unmanned aerial systems for military use.

[2] Judson, J. 2023a. “Army eliminates AeroVironment from future tactical UAS competition.” C4ISRNET.
[3] Judson, J. 2023b.” US Army chooses 5 companies to compete for Army’s future tactical UAS.” Defense News.
[4] AeroVironment. 2023. “AeroVironment Provides FTUAS and Business Update.”

Several of ARK’s multi-omics holdings, listed below, traded up significantly this week. Surface Oncology, Schrodinger, 908 Devices, and Quantum-Si all appreciated by ~15-17% on Monday or Tuesday, while Recursion Pharmaceuticals and Ginkgo Bioworks ended the week up ~60% and ~19%, respectively. While the reason for the significant shift into this subset of multi-omics growth companies is unclear, our research suggests that the market is recalibrating around the artificial intelligence-enabled technology that is benefiting and may continue to benefit these names, and others, disproportionately. Like the companies listed below, for example, AbCellera Biologics (ABCL) and Exscientia PLC (EXAI) are involved heavily in artificial intelligence/machine learning (AI/ML)-enabled technologies and appreciated ~20% on Monday. We maintain strong conviction in the transformative potential of AI/ML in the multi-omics space and have positioned certain strategies managed by ARK Invest potentially to capitalize on this disruptive technology.

LIST OF MULTI-OMICS NAMES (list chronological by date of 15% move):

• SURF
  Shares of Surface Oncology traded up ~17% on Monday. Surface Oncology focuses on innate and adaptive immune systems to create better immune-enhancing antibody candidates.
• SDGR
  Shares of Schrodinger traded up ~17% on Monday. Schrodinger is a computational chemistry company focused on building the most powerful, physics-based molecular modeling platform.
• QSI
  Shares of Quantum-Si traded up ~15% on Monday. Quantum-Si is the world’s only provider of protein sequencing instruments, its core technology based on proprietary time-domain sequencing that enables amino acid level resolution during experiments.
• RXRX
  Shares of Recursion Pharmaceuticals traded up ~26% on Monday. Recursion is a platform-based therapeutics company industrializing drug discovery. Its key differentiator, Recursion OS, integrates technologies spanning wet and dry-lab biology with the goal of optimizing preclinical success.
• DNA
  Shares of Ginkgo Bioworks traded up ~17% on Monday. Ginkgo Bioworks develops and optimizes microbes for valuable downstream products in many industries. With large, automated lab facilities, it partners with many companies. In our view, intellectual property along with equity and royalty streams from its partnerships are Ginko’s primary value drivers.
• MASS
  Shares of 908 Devices traded up ~16% on Tuesday. 908 Devices is a life sciences tools company that miniaturizes mass spectrometry to decentralize chemical and biomolecular analyses.