In the latest episode of ‘In The Know,’ Cathie Wood said that infrastructure bottlenecks, such as shortages in labor, chips, and power, would actually result in forced efficiencies in the AI sector.
- Wood said the election has led to a slight improvement in credit default swaps, as markets now expect hyperscalers to contend with their mistakes through a forced slowdown.
- However, she also emphasized that AI-driven productivity gains would continue to accelerate and translate into higher compensation, stronger margins, increased investment, and lower prices.
- On Nov. 5, U.S. markets lost about $3 trillion in total market capitalization after the Democrats won both chambers in Congress.
Ark Investment Management’s Cathie Wood said over the weekend that despite growing concerns about artificial intelligence buildout amid the Democratic Party’s victory in the midterm elections, the long-term thesis for AI remains intact.
In the latest episode of ‘In The Know,’ Wood said that infrastructure bottlenecks, such as shortages in labor, chips, and power, would actually result in forced “efficiencies,” resulting in an opportunity “to introduce more efficiencies very early on into a technology revolution” which could result in it becoming more “longer-lasting and much healthier.”
Wood’s comments came amid a massive selloff in AI-linked and technology shares last week after a blue wave election result stoked concerns about a slowdown in AI buildouts in the U.S.
On Nov. 5, U.S. markets lost about $3 trillion in total market capitalization, with the tech-heavy Nasdaq notching its steepest one-day decline since ‘Liberation Day’ in April 2025.
Wood Touts AI-Driven Productivity Gains
Wood said the election has led to a slight improvement in credit default swaps, as markets now expect hyperscalers, which raced into the AI age to build data centers, to contend with their mistakes through a forced slowdown.
However, she also emphasized that AI-driven productivity gains would continue to accelerate and translate into higher compensation, stronger margins, increased investment, and lower prices.
Economy’s Growth Trajectory Is Strong
Wood also said the economy was “on a growth trajectory that is much stronger than most people recognize.” She cited 3.4% third-quarter GDP growth, adding that she expects housing to eventually recover and that productivity gains, lower oil prices, and AI-driven cost reductions will support stronger nominal GDP growth.
She forecast a “win-win situation” amid lower-than-expected inflation, as “productivity, oil prices, AI costs seeping into the cost structure of every industry, every company” will boost nominal GDP growth.
Market Reaction
At the time of writing, the SPDR S&P 500 ETF (SPY) was up 0.29% amid ‘neutral’ sentiment. The Invesco QQQ Trust (QQQ) was flat amid ‘bearish’ sentiment, while the SPDR Dow Jones Industrial Average ETF Trust (DIA) gained 0.56% amid ‘bullish’ sentiment.
The Global X Artificial Intelligence & Technology ETF (AIQ), which tracks companies involved in the AI trade, was up 0.33% at the time of writing amid ‘bullish’ sentiment.
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