Cathie Wood, CEO of Ark Invest, remains optimistic about the market despite recent volatility. In an interview with CNBC on Friday, Wood dismissed concerns about a Democrat-led Congress slowing down data center construction and emphasized that investor worries actually bolster her confidence in further gains. She noted that the current market environment is marked by a 'wall of worry,' which she views as a positive sign for a durable bull market.
Wood highlighted that the tech and telecom bubble of the past lacked such caution, contrasting it with the current AI-driven market. She pointed out that investors have been concerned about AI-related capital expenditure, cash flow, and debt since the beginning of the year. Despite these concerns, Wood believes the bull market remains intact, citing the development of technologies like robotaxis and AI agents as evidence of a broader technology revolution.
The market turbulence has been partly driven by rising interest rates and bond yields, fueled by the U.S.-Iran war and global inflation. Wood noted that bond investors, who traditionally focused on low fixed-cost software, are now grappling with the high fixed costs of AI. However, she argued that AI hyperscalers are somewhat insulated by growth opportunities, making debt less of a concern for these companies.
Wood advised investors to focus on high-conviction positions during volatile periods. She recommended taking profits during rallies and reinvesting during sell-offs. Ark Invest has been concentrating on its highest-conviction names, including increasing its SpaceX position. Looking ahead to 2027, Wood expects the equity rally to continue, describing the post-election turbulence as 'two steps forward, one step back.'