Cathie Wood, founder and CEO of ARK Investment Management LLC, defended the future of artificial intelligence investments while highlighting Tesla Inc. as a cornerstone of technological innovation during a recent podcast appearance with SoFi‘s Head of Investment Strategy, Liz Thomas.
Shares of Tesla gained 1.4% in premarket trading.
What Happened: Wood popularly known for leading ARK Innovation ETF characterized Tesla as “the largest AI project on Earth,” emphasizing AI’s transformative potential across multiple sectors.
She particularly highlighted healthcare advancements, where AI’s convergence with sequencing technologies could revolutionize cancer diagnosis through blood testing, especially when combined with CRISPR gene editing capabilities.
Addressing concerns about heavy GPU and cloud infrastructure investments by major tech companies, Wood acknowledged investor skepticism about capital expenditure increases.
Wood cited Microsoft Corp‘s dramatic spending surge from $30 billion to $60 billion in 18 months as an example of investments that have yet to demonstrate clear returns.
Why It Matters: The ARK Invest CEO’s comments come amid her firm’s recent portfolio adjustments, including an $18 million reduction in Tesla holdings through its flagship funds. Despite these sales, Wood maintains a bullish long-term outlook on Tesla’s autonomous driving potential, projecting a “trillion-dollar-plus revenue opportunity.”
Wood’s investment thesis extends beyond Tesla to the broader biologics sector, where she envisions a $400 billion market opportunity emerging from the convergence of AI, genetic sequencing, and gene editing technologies.
Her ARK Genomic Revolution ETF, managing 1.179 billion in assets, reflects this conviction through significant investments in companies like Twist Bioscience Corp. and CRISPR Therapeutics AG.
Responding to concerns about elevated market valuations, Wood noted that current market multiples in the low 20s leave little room for error. However, she remains confident in the emergence of transformational business models, particularly at the intersection of AI and healthcare innovation, where she sees potential for revolutionary advances in disease treatment and diagnosis.