Cathie Wood ‘always feels better when the market is worried’

Ark Invest CEO Cathie Wood is shrugging off this week’s market jitters, telling CNBC on Friday that concerns among investors actually reinforce her optimism that further gains lie ahead.

U.S. equities sold off sharply on Thursday, reversing the initial rally seen in the wake of the midterm elections. AI-related stocks led the rout, sending the tech-heavy Nasdaq Composite into correction territory. On Friday, tech stocks staged a tentative recovery.

Much of the sell-off on Thursday was driven by concerns that a Democrat-led Congress would lead to a slowdown in data center construction. But concerns about artificial intelligence – particularly when it comes to capital expenditure, cash flow, debt and circular financing – have sparked multiple bouts of volatility over the course of this year.

Wood, whose firm manages various funds focused on tech and innovation, told CNBC there was a “wall of worry” pervading financial markets right now. But her decades of experience as an investor give her a somewhat unconventional view of the state of play.

“I experienced the tech and telecom bubble, and you know there really wasn’t much worry about it,” she said. “It was the 80s and the 90s, and it was a bull market, and people were just assuming this would go to the moon, that is not how this [the AI trade] has evolved.”

She explained that “from the beginning,” many investors have been concerned about how much firms are spending on AI development, how rapidly the spending is taking place, and how the hyperscalers have moved from extreme levels of positive free cash flow to negative free cash flow.

“So it’s been unsettling the markets for quite some time,” she said. “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.”

In 2025, her flagship Ark Innovation ETF gained more than 35%, far outperforming the S&P 500’s 16.4% rise and the Nasdaq Composite’s 20.5% rally.

Asked on Friday whether markets were anywhere near the end of the current bull run, Wood replied: “I don’t think so.”

“I think we’re in the middle of a technology revolution,” she said, pointing to the development of technologies like robotaxis and AI agents.

One thing that did risk becoming a “showstopper,” Wood noted, was the rising cost of capital.

Interest rates and bond yields have risen sharply this year as the U.S.-Iran war pushes inflation higher across the globe. Yields on corporate bonds have been rising too, with creditors demanding greater compensation for lending to companies.

“This correction is partly caused by what’s going on in the bond markets,” Wood said on Friday.

“I had been saying for quite some time that the wall of worry has been built by senior leaders in the financial world who were young during the bubble,” she said.  

“It’s the elder statesmen and women of the industry who are keeping this wall of worry in place, and that’s not bad. Now you…