Cathie Wood Sees Market Anxiety as Support for Further Stock Gains

Ark Invest CEO Cathie Wood says investor unease is strengthening her confidence that the stock market has further room to rise. Speaking to CNBC on Friday, she argued that persistent scrutiny of artificial intelligence spending could help sustain the bull market, even as technology shares face renewed pressure.

U.S. stocks fell sharply on Thursday, wiping out the initial rally that followed the midterm elections. AI-linked shares drove the decline, pushing the Nasdaq Composite into correction territory before technology stocks began a tentative recovery on Friday. Much of Thursday's selling reflected fears that a Democrat-led Congress would slow data center construction.

The latest political concerns added to questions that have repeatedly unsettled markets this year, including the scale of AI capital spending, cash flow, debt and circular financing. Wood said investors had questioned AI investment from the outset, particularly its speed and the shift among hyperscalers from strongly positive free cash flow to negative free cash flow.

For Wood, that skepticism distinguishes the current market from the technology and telecommunications bubble she experienced. She recalled widespread confidence during the bull market of the 1980s and 1990s, when investors largely expected prices to keep climbing. The current atmosphere of concern, she said, suggests a rally with greater staying power rather than one that has run its course.

Wood said she believes markets remain in the midst of a technological revolution, citing robotaxis and AI agents. Her firm's flagship Ark Innovation ETF rose more than 35% in 2025, beating the S&P 500's 16.4% gain and the Nasdaq Composite's 20.5% advance. Asked whether the current bull market was nearing its end, she said she did not believe it was.

Rising financing costs were a potential obstacle, however. Interest rates and bond yields have climbed sharply this year as the U.S.-Iran war drives inflation higher globally. Corporate bond yields have also increased as lenders seek greater compensation. Wood attributed part of the market correction to developments in bonds.

She said experienced financial industry leaders who remember the earlier technology bubble have helped maintain investor caution, with bond investors now adding scrutiny. Unlike software businesses with low fixed costs and high margins, AI requires substantial fixed investment, bringing lenders deeper into the technology sector. Wood nevertheless argued that hyperscalers' growth opportunities could cushion the effect of higher interest rates when borrowing accelerates their expansion.

During the volatility, Ark has concentrated its investments in companies it believes in most strongly, Wood said. Its SpaceX position has increased over roughly the past week. She suggested that controversy surrounding terrestrial data centers could create greater opportunities for data centers in space. She also advocated taking some profits during rallies to make it easier to reinvest during declines.

Looking toward 2027, Wood expects equities to continue advancing. She described the post-election turbulence as a setback within a continuing rally and said the technological changes underpinning her outlook should become clearer next year.