ARK Invest CEO Cathie Wood told CNBC on Friday that concerns among investors reinforce her optimism for further market gains. Wood's comments followed a sharp Thursday selloff in U.S. equities that reversed the initial rally after midterm elections, with AI-related stocks leading the rout and sending the tech-heavy Nasdaq Composite into correction territory. Wood attributed investor worry to concerns about data center construction under a Democrat-led Congress and ongoing questions about AI capital expenditure, cash flow, debt, and circular financing. The ARK Invest CEO said decades of experience give her an unconventional view, stating she "always feels better when the market is worried" because it suggests a more durable bull market. Wood's flagship ARK Innovation ETF gained more than 35% in 2025, outperforming the S&P 500's 16.4% rise and the Nasdaq Composite's 20.5% rally.
Wood Describes Market's Wall of Worry
Wood told CNBC there was a "wall of worry" pervading financial markets. She contrasted the current environment with the tech and telecom bubble of the 80s and 90s, when investors assumed markets "would go to the moon." Wood said the AI trade has evolved differently, with investors concerned from the beginning about spending levels, spending pace, and hyperscalers moving from extreme positive free cash flow to negative free cash flow. "I always feel better when the market is worried, because that tends to suggest a more durable bull market, and I don't think we've derailed this bull market," Wood stated.
ARK Innovation ETF Gained 35% in 2025
Wood's flagship ARK Innovation ETF gained more than 35% in 2025, far outperforming the S&P 500's 16.4% rise and the Nasdaq Composite's 20.5% rally. Asked whether markets were near the end of the current bull run, Wood replied "I don't think so," pointing to ongoing development of technologies like robotaxis and AI agents. Wood said "we're in the middle of a technology revolution."
Rising Interest Rates From U.S.-Iran War Cited as Correction Factor
Wood identified rising capital costs as a risk, noting interest rates and bond yields have risen sharply this year as the U.S.-Iran war pushes inflation higher globally. "This correction is partly caused by what's going on in the bond markets," Wood said on Friday. She noted yields on corporate bonds have been rising as creditors demand greater compensation for lending to companies. Wood said the "wall of worry has been built by senior leaders in the financial world who were young during the bubble," adding that bond investors are now "taking a journey into the technology world" due to AI's high fixed costs.
Wood Advises Concentrating on High-Conviction Positions
Wood advised investors in the current volatile environment to identify high-conviction positions and double down as markets shift. "When you see a rally in a volatile environment, take some profits. When you see a sell-off, you'll have the psychological wherewithal if you have taken profits to move back in," she stated. Wood said ARK Invest concentrates toward highest conviction names during volatile periods, noting the firm's SpaceX position has increased. She said controversy around data centers on Earth is "giving data centers in space a bigger opportunity."
Wood Expects Equity Rally to Continue in 2027
Wood said she expects the equity rally to continue in 2027. "This is two steps forward, one step back," she said of the post-election turbulence. "The revolution will become clearer and clearer next year, and I think the market will do well," Wood stated.
FAQ
Why does Cathie Wood feel better when the market is worried?
Cathie Wood told CNBC on Friday that she "always feels better when the market is worried" because it tends to suggest a more durable bull market. She contrasted the current environment with the tech and telecom bubble of the 80s and 90s, when investors assumed markets would go to the moon without much concern. Wood said investor worry about AI spending, cash flow, and debt has been unsettling markets for some time, but she believes this concern supports rather than undermines the bull market.
How did ARK Innovation ETF perform in 2025 compared to major indices?
ARK Innovation ETF gained more than 35% in 2025, far outperforming the S&P 500's 16.4% rise and the Nasdaq Composite's 20.5% rally. Wood told CNBC on Friday that despite this outperformance, she does not believe markets are near the end of the current bull run, citing ongoing development of technologies like robotaxis and AI agents.
What does Cathie Wood identify as the main risk to the current bull market?
Wood identified rising capital costs as a risk that could become a "showstopper." She told CNBC on Friday that interest rates and bond yields have risen sharply this year as the U.S.-Iran war pushes inflation higher globally, and that "this correction is partly caused by what's going on in the bond markets." Wood noted that bond investors are now experiencing a journey into the technology world due to AI's high fixed costs, unlike previous software-focused tech cycles.
