ARK Invest CEO Cathie Wood says the market is still treating the AI boom like a trauma response.
In a new episode of ARK Invest’s In The Know podcast, Wood says this cycle looks nothing like the late 1990s mania that still haunts investors today.
Wood says the setup is unusually constructive for long-term innovation investing, believing that the AI trade has more room to run to the upside.
“Unlike the tech and telecom bubble, this is the real deal. Unlike the tech and telecom bubble, people are scared to death. As a portfolio manager in the world of innovation, I would prefer fear and climbing a wall of worry than the speculative excesses that we saw in the tech and telecom bubble.”
Wood says some investors are looking at AI and assuming it is already in bubble territory, but she rejects that framing and claims ARK’s research points to an earlier stage of the cycle.
“Now you might say, AI is going through that, that’s been part of the worry in the market. We don’t think so. All the research we’re doing would suggest that we are in the equivalent of 1996 in the technology or the internet revolution that was taking place back then. Very, very early.”
Wood says the skepticism is being reinforced by “scar tissue” from investors who lived through the dot-com era and now default to defense whenever a new platform shift shows up.
“And sure, it went into overdrive. It went crazy… And the scar tissue in the market today [is] because those who went through the tech and telecom bubble are gray hairs in our business now, and they have that scar tissue, muscle memory, whatever it is, to call it. And they’re saying, as the most seasoned investors, ‘I am going to protect my firm against this risk.’”
She also points to volatility as part of the process, noting that uncomfortable pullbacks can create entry points rather than invalidate the theme.
“It’s volatile. It can be uncomfortable, but just like last April, these can be very important opportunities to invest in the next big thing. And we’re ready for primetime.”
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