Cathie Wood’s ARK funds have invested $40 million in Nvidia shares after dumping $51 million worth of the chipmaker shares just last week. The move came the day the chipmaker stock plunged 8%, dropping to a 52-week low, as the market reacted to the news of the company being asked by US officials to halt exports of some chips to China.

Notably, ARK unloaded almost the same volume of Tesla shares in order to fund its purchase of Nvidia shares. Tesla still remains the top holding across all ARK funds.

Why Nvidia Hit 52-week Lows

On Wednesday, US officials reportedly told Nvidia to stop exporting A100 and H100 chips, two of its top computing chips, for artificial intelligence work to China. The ban, according to the chipmaker, could hamper a business that accounted for $400 million in sales in the current quarter.

The disclosure sent the company’s shares down about 3% in after-hours trading. On Thursday, Nvidia’s shares resumed their downtrend, falling by almost 8% to around $139. As of now, the chipmaker’s stock is down by 0.55% in pre-market.

The ban signals escalating US-China tensions that arguably entered a new level with Nancy Pelosi’s visit to Taiwan. Without the chips from companies like Nvidia and its rival Advanced Micro Devices, Chinese companies won’t be able to cost-effectively perform advanced computing using image and speech recognition, among many other tasks.

However, Nvidia on Thursday said the US government will allow it to continue developing its H100 artificial intelligence chip in China, despite the ban on sales being in place. In a filing, the company said:

“The U.S. government has authorized exports, reexports, and in-country transfers needed to continue NVIDIA Corporation’s, or the Company’s, development of H100 integrated circuits.”

Ark Buys the Dip

After unloading 51 million worth of Nvidia stock ahead of the chipmaker’s results last month, Cathie Wood’s ARK Invest has bought the dip in the stock, adding it across three of the company’s funds.

The flagship ARK Innovation Fund (ARKK) purchased $31 million worth of Nvidia, and the ARK Autonomous Technology & Robotics ETF (ARKQ) snapped up $4 million worth of shares. Furthermore, the ARK Next Generation Internet ETF (ARKW) bought $5 million worth of Nvidia. The purchase came after Nvidia shares dropped to 52-week lows.

The purchases were offset by identical sales of Tesla shares in each of the funds. It is worth noting that Tesla is still the top holding in two of the funds, including ARKQ and ARKW, and third in the company’s flagship fund. Zoom and Roku are the top two holdings of Wood’s ARKK.

Along with the broader market downturn, ARK’s funds have also been performing poorly. The company’s flagship innovation fund has dropped 56% this year. It’s also suffered $803 million in outflows over the last month, according to FactSet data, though it’s brought in $982 million worth of inflows this year.

On the other hand, Nvidia is down by around 53% year-to-date (YTD). The company also reported a 19% overall revenue decline in the second quarter of the year, which was largely attributed to the drop in demand for Nvidia’s GPUs.

This article originally appeared on The Tokenist

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