"Market Turmoil Reassures Me": Why Cathie Wood Isn't Worried About an AI Stock Crash

ARK Invest CEO Cathie Wood does not share investors’ concerns about the sell-off in tech stocks following the U.S. midterm elections. In addition, she expects the stock market to continue growing in 2027, with the tech revolution becoming increasingly evident. The fund is currently buying shares of companies that have fallen in price but whose prospects she is most confident about, Wood said in an interview with CNBC.

Wood attributes the current stock market correction in part to the situation in the debt market: bond yields have risen sharply, and lenders have begun demanding a higher risk premium. This is particularly important for technology companies, as AI development requires much higher fixed costs than software development and forces them to increasingly turn to debt financing.

Wood believes that investors have been concerned from the very beginning about the scale of investments in AI and the pace at which tech companies’ expenses are growing. Whereas previously the largest cloud infrastructure providers had record amounts left over after capital expenditures, their expenses now exceed revenue from core operations.

Wood believes that the largest AI companies can afford to raise capital even when interest rates are high—if borrowed funds allow them to significantly accelerate their business growth, the additional costs of servicing the debt will not be a problem.

Wood believes that the technological revolution is currently in full swing and that the stock market rally will continue. ARK Invest continued to buy Tesla and SpaceX shares during the current correction: despite the fact that the companies lost $420 billion in market capitalization in the two days following the U.S. midterm elections, the fund remains confident in their long-term prospects. Wood sees the creation of data centers in space as one possible direction for SpaceX’s development. In her view, Americans’ dissatisfaction with plans to build data centers near their homes makes locating such facilities in space a more attractive option.

Despite the optimistic outlook, Wood advises investors to be mindful of sharp market fluctuations: “When you see stocks rising despite market volatility, it’s a good idea to lock in some of your profits. That way, during the next sell-off, it will be psychologically easier for you to start buying again,” says Cathie Wood.

Cathie Wood caught Wall Street’s attention in 2020 when her flagship fund posted a return of more than 150% and attracted billions of dollars from investors. Wood founded ARK Invest back in 2014, but her “prime era” didn’t begin until the pandemic, amid the rapid growth of tech stocks. By the end of 2025, Wood’s flagship fund, the Ark Innovation ETF, had risen by more than 35%, significantly outperforming the S&P 500 and Nasdaq Composite indices.

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