Ark Invest’s Wood sees opportunity amidst market anxieties

U.S. stocks experienced a significant decline on Thursday, erasing early gains following the midterm elections. The Nasdaq Composite entered correction territory, largely due to losses in artificial intelligence-related stocks. Friday saw a partial rebound for technology shares.

Concerns about a potential slowdown in data center construction, fueled by the prospect of a Democrat-controlled Congress, contributed to Thursday’s sell-off. Broader worries surrounding artificial intelligence – including capital expenditure, cash flow, debt, and financing – have caused volatility throughout the year.

Wood, whose firm manages funds specializing in technology and innovation, described a pervasive “wall of worry” in financial markets. Her investment experience provides a unique perspective on the current situation.

“I experienced the tech and telecom bubble, and you know there really wasn’t much worry about it,” she told CNBC. “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 elaborated that investors have consistently questioned the level of spending on AI development, the speed of that spending, and the shift in hyperscalers from substantial positive free cash flow to negative free cash flow.

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