ARK Invest’s Cathie Wood Predicts End of Rolling Recess…

Cathie Wood, the CEO of ARK Invest, believes the U.S. economy is nearing the end of what she calls a “rolling recession”—and is heading toward an unprecedented productivity boom fueled by artificial intelligence and other emerging technologies.

Speaking in her podcast “In the Know”, Wood outlined a bullish vision where technological innovation drives real GDP growth to more than double historical rates, even as short-term economic indicators show signs of weakness.

“We’re coming to the end of [the rolling recession],” Wood said, referencing the economic downturn she believes has been unfolding since the Federal Reserve began raising interest rates in 2022. “The bad news is we do have to go through this process.”

She later said on Twitter that the current crisis (the “process” as referenced in her video) may be the gate to a “deflationary boom” by the second half of 2025.

Her comments came as the stock market experienced one of its worst daily performances since 2022 and the Atlanta Fed’s GDPNow indicator suggests first-quarter real GDP could contract by nearly 3%.

Despite this current weakness, Wood appears to align with Trump’s optimistic stance on America’s economic future, particularly as new technologies reshape the economy. “We’re probably on the threshold of some of the most important productivity gains in history,” she said.

Wood’s firm has built its reputation on high-conviction bets on disruptive innovation, particularly in sectors like genomics, autonomous technology, crypto, and artificial intelligence.

That said, Wood’s Ark Innovation ETF has underperformed the S&P 500 since its creation, following a massive crash in 2022.

Wood discussed the proposed fiscal policies under the Trump administration, including a $4.5 trillion tax cut that passed the House budget committee.

She added that those reductions would come on top of the $1.9 trillion extensions from the Tax Cuts and Jobs Act.

Wood believes Trump’s fiscal policies, combined with deregulation efforts, could spark a significant economic boom.

She pointed to changes already happening in the crypto and digital asset space following SEC Chair Gary Gensler’s departure, noting the industry is celebrating “the digital asset revolution” at the White House.

For investors, Wood predicted a market shift away from the “Magnificent Seven” tech giants toward broader innovation stocks. She noted that while the “Mag 7” have tripled over the past five years, truly disruptive innovation stocks have only appreciated by about 30%.

“We think that’s going to flip in the years ahead, and the market is going to broaden out significantly and reward stocks that have been neglected out of fear in the last few years,” Wood said.

Wood also shared data on AI adoption, particularly comparing daily active users across various AI chat platforms. Her charts showed ChatGPT maintaining a dominant position but with competitors like Anthropic’s Claude, Google’s Gemini, and particularly Elon Musk’s Grok gaining momentum.

“Don’t underestimate Grok,” Wood said, noting its daily active users were growing even faster than DeepSeek, another AI system that recently captured attention. She also highlighted the growing trend toward open-source AI models, which includes DeepSeek, Meta’s Llama models, and eventually Grok.

People Aren’t Conviced

While Wood paints a beautiful picture of the future economy, the public reaction to her analysis seems to be overwhelmingly negative. Comments on her official Youtube channel reveal widespread skepticism about her economic forecasts and investment strategy, especially when it comes to Trump’s impact in the economy.

“Once a visionary, but now… just living in denial,” wrote one viewer, while another questioned, “Has anyone looked at her 5 year performance? Horrible.”

Another commenter pointed to Wood’s failure to scrutinize the Trump administration’s scientific literacy: “Trump misunderstood transgenic mouse research for ‘transgender mice research.’ As someone who’s heavily invested in the biotech future I hope that you have an intelligent skeptical eye for what you are hearing coming out of administration.”

The skepticism extends to Wood’s economic analysis, with many questioning the viability of the tariff strategy she discussed. “What is she smoking, I want some too. It is obvious that the tax cuts are going to be paid by the income from tariffs (hence the targeting of the US’s biggest trading partners, which should produce the biggest income)…this will not end well,” wrote one commenter.

Others questioned the fiscal logic

“The US is on an unsustainable fiscal trajectory with mounting debt and a president who thinks that economic policy is the same as tax policy,” another YouTube user responded. “The proposed tax cuts will dwarf the expected collections through tariffs and DOGE savings.”

And people on X didn’t look too pleased either.

Despite criticism, Wood remains bullish—perhaps too bullish.

“This bull market will continue to broaden out and perhaps be one of the strongest bull markets in history,” Wood said. “If we’re right that real growth accelerates as inflation maybe even turns negative thanks to these new technologies.”