Cathie Wood, the high-profile investor overseeing approximately $22 billion (US$16 billion) across her Ark Invest funds, is proclaiming the sharemarket is in the nascent stages of a “golden era.” This optimistic outlook is predicated on a technology revolution expected to significantly accelerate economic growth and potentially usher the United States into a period of “good deflation.” Ark Invest manages funds focused on disruptive innovation, identifying and investing in companies poised to fundamentally alter global operations through new, technologically enabled products or services. Wood, known for her bold calls on firms like Tesla, believes massive technological shifts are currently being underestimated.
Wood is particularly bullish on artificial intelligence, which she believes is transforming various sectors including robotics, energy storage, blockchain, and life sciences. These advancements are anticipated to unlock substantial productivity gains, leading to sustained higher real GDP growth while the costs of producing and distributing goods and services decline. She draws strong parallels between the current market environment and the 1980s and 1990s, a period she describes as a golden age for equities where markets climbed “a wall of worry” despite widespread investor discomfort.
Despite ongoing concerns about inflation, interest rates, and geopolitical tensions, Wood remains steadfast. Her firm holds significant positions in companies like Elon Musk’s SpaceX and Tesla, which combined represent 15 per cent of Ark’s flagship fund. Wood recently increased Ark’s stake in SpaceX, envisioning the “AI rocket company” acquiring Tesla to become the world’s largest business. While acknowledging worries about the global AI trade, such as competition from China and slowing capital expenditure, Wood largely dismisses them, suggesting current apprehension is a healthy sign. She did concede that growing political unease in the US regarding AI data centres could be a “short-term spoiler.” Ark recently opened its venture capital strategy, investing in pre-IPO disruptive innovation giants such as OpenAI, to Australian wholesale investors, citing strong demand.
