In an era marked by economic uncertainty, Cathie Wood, the visionary founder and CEO of ARK Investment Management, remains steadfastly optimistic about the future of the American economy and markets. Speaking in a recent Bloomberg Television interview on May 19, 2025, Wood outlined her bullish perspective on several sectors, particularly highlighting technology, healthcare, and artificial intelligence as driving forces behind what she believes will be unexpected economic growth.

Listen to our chat about a massive growth prediction for tech stocks:

Trump’s Tariffs: A Pathway to Freer Markets

While President Trump’s tariff policies have sparked market volatility, Wood sees them as potential catalysts for economic revitalization rather than barriers to trade.

“It actually feels a lot better right now than it did at the beginning of so-called Liberation Day, when it seemed chaotic,” Wood remarked during her Bloomberg Television appearance. She explained that her team had hypothesized that extensive behind-the-scenes negotiations were taking place, particularly noting the significance of Treasury Secretary Bessant taking over from Peter Navarro.

Wood believes these negotiations aim to reduce both tariffs and non-tariff trade barriers. “If that is where we end up, that’s a tax cut. That’s a positive,” she stated. She pointed to recent developments in U.S.-UK trade relations, noting new opportunities to sell American beef and ethanol to the UK market, suggesting these changes represent a “freeing up of markets” rather than protectionism.

Deficit Concerns and Growth Projections

When confronted with concerns about America’s ballooning deficit, Wood cited her adherence to the Laffer curve economic theory, referencing evidence from Trump’s first term when corporate tax rates were reduced from 35% to 21%.

“Corporate tax revenues since then have gone from 200 billion to 500 billion. As more companies relocate back into the US, we’re more competitive now,” Wood explained. “So if tax rates are too high, then cutting the rates typically leads to more revenue.”

Wood expressed confidence that technological innovation will drive economic growth beyond current expectations. “We think real GDP growth is going to accelerate well beyond what people expect now,” she asserted, challenging those who dismiss the possibility of growing out of deficits.

The Evolution of the Tech Sector Beyond the “Magnificent Six”

While much attention has focused on the “Magnificent Six” tech giants, Wood sees broader opportunities across the technology landscape. She noted that while these six companies quintupled in market capitalization from 2019 to 2024, the rest of the technologically enabled innovation sector rose a mere 30%.

“We believe the market is going to broaden out and reward some of the companies that have lagged badly,” Wood predicted, highlighting several examples including CRISPR Therapeutics, Coinbase, Palantir (which recently joined the S&P 500), and Roku.

Wood emphasized that her portfolio companies have faced significant headwinds over the past four years, with valuations dropping to roughly a market multiple. “We were at 275% premium to the S&P. Now we’re at roughly a 10% premium,” she revealed, suggesting that innovation-focused companies outside the dominant tech giants are now “highly undervalued.”

AI’s Transformative Impact on Healthcare

Perhaps most striking is Wood’s conviction that healthcare represents “the most underappreciated beneficiary” of artificial intelligence. She explained that AI is dramatically reducing innovation costs, with “AI training costs dropping 75% per year” and “AI inference costs 85 to 95% per year.”

“The most profound AI applications are going to be in health care,” Wood asserted. “If you think what makes AI tick, it’s data. We have 37 trillion cells in our body that we’re now analyzing.”

Wood believes healthcare companies can substantially improve their returns on R&D investment through AI adoption. “We think the healthcare sector has the opportunity here to take returns on R&D, which are in the low single digit range, way down from the golden age of the eighties and nineties when they got up to 20, 30% back to 15, 30, even 40% because AI is going to collapse the cost of drug discovery and development.”

She forecasts dramatic efficiency improvements, including reducing drug development timelines “from 13 years to eight years” and shifting healthcare spending from “sick care” toward curative therapies. Wood cited CRISPR Therapeutics’ progress in curing sickle cell disease and beta thalassemia as examples of this transformation.

Government Efficiency and Innovation

Addressing concerns about government spending, Wood highlighted Elon Musk’s government efficiency project, noting how it has exposed outdated technology and manual processes within government systems. She mentioned Palantir’s work with the Department of Defense and its expansion into other government sectors as examples of increasing efficiency.

Wood also praised regulatory improvements, noting that “the FDA already has approved for the first time a piece of software code which will help in the diagnosis of heart disease.”

For investors looking beyond the traditional tech giants, Wood’s perspective offers a compelling case for considering overlooked sectors—particularly healthcare and biotechnology—where AI and technological innovation may unleash significant value in the coming years.