Ark Invest sees market worries supporting technology bull run

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Ark Invest bets on tech rally

Highlights

AI-related shares led a selloff pushing the Nasdaq Composite into correction territory, driven by investor concerns over data center construction and higher bond yields.
Ark Innovation ETF gained over 35% in 2025, outperforming the S&P 500's 16.4% and the Nasdaq Composite's 20.5%, as Ark concentrated on high-conviction holdings.
Ark increased its SpaceX position recently, anticipating controversy over terrestrial data centers could boost demand for space-based data centers.

Wood links volatility to AI spending and bond markets

As reported by CNBC, Wood says a "wall of worry" is gripping financial markets, with investors focused on capital expenditure, cash flow, debt and financing risks tied to artificial intelligence. She argues that persistent skepticism is healthier for a longer-lasting rally than the unchecked optimism that marked the tech and telecom bubble.

U.S. equities sell off sharply on Thursday, reversing an initial rally after the midterm elections, before tech stocks stage a tentative recovery on Friday. AI-related shares lead the decline, pushing the Nasdaq Composite into correction territory as investors weigh whether a Democrat-led Congress could slow data center construction.

Wood says the correction is partly driven by turbulence in bond markets, where interest rates and yields have risen sharply this year as the U.S.-Iran war lifts inflation pressures globally. She adds that bond investors are becoming more important to the technology sector because AI infrastructure carries higher fixed costs than earlier software-driven business models.

Fund positioning and broader market implications

Wood says Ark is using the volatile period to concentrate further on its highest-conviction holdings, while advising investors to take profits during rallies and redeploy during sell-offs. She says that approach helps investors preserve the psychological flexibility to add risk when markets weaken.

Her flagship Ark Innovation ETF gained more than 35% in 2025, outperforming the S&P 500's 16.4% rise and the Nasdaq Composite's 20.5% rally. Wood says she still believes the market is in the middle of a technology revolution, highlighting areas such as robotaxis and AI agents, and adds that companies able to accelerate growth through borrowing may remain relatively insulated from higher rates.

She also says Ark has increased its SpaceX position over the past week or so, arguing that controversy around terrestrial data centers could create a bigger opening for data centers in space. Looking ahead to 2027, Wood says she expects the equity rally to continue, describing the current period as two steps forward and one step back as the technology shift becomes clearer.

Our earlier coverage of U.S. AI data center expansion highlighted growing strain on the buildout as higher funding costs, construction delays, and power constraints collide with ambitious investment plans. We noted that only a portion of proposed projects appeared truly viable, while setbacks and cost overruns were already testing investor confidence and raising questions about whether developers can deliver capacity on time and within budget.

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