Ark Invest CEO and CIO Cathie Wood Talks Tech, Tesla and Deregulation
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What is the main topic discussed in this episode?
Bloomberg Audio Studios.
Podcasts, radio, news. Carol Master along with Tim Stenevik live here at Bloomberg headquarters in New York City. Well, 2026, as you know, off and running follows three years of double digit gains for the S&P 500, a total gain of around 80% over those three years. Three years of back-to-back gains as well. That's the S&P. Three years of back-to-back gains also for the Nasdaq 100, a total gain of about 130% there. And yet, even with the stock market gains in the U.S. in 2025 last year, measured against equities worldwide minus the U.S., stocks have risen around 30%, roughly double the S&P 500's gain. That's according to the MSCI's index.
What are Cathie Wood's predictions for the economy by 2026?
Here to talk about 2026, the economy, investment ideas. Great to have back with us the founder, CEO, and CIO of ARK Invest, Kathy Wood. She joins us from St. Petersburg, Florida. Kathy, great to have you here. Happy New Year.
Happy New Year, Carol and Tim. Very happy to be here again.
Well, it's great to have you here. And I want to start with what stocks did here in the U.S. really well last year. But if you look at global stocks, you could say that there was certainly some underperformance by the U.S. You've invested in a lot of U.S. names, but also a lot outside the U.S. And I think about Chinese companies, BYD, Baidu, Alibaba. Are you looking for more opportunities outside the U.S. at this point? And I wonder if you think it's time for maybe U.S. stocks to take a look?
I think we're very focused on the deregulation, lower taxes, and what we believe will be lower inflation, much lower inflation, and lower interest rates in the US. And we think the combination of those is actually going to drive the returns on invested capital in the US up relative to those in the rest of the world. And I think many people are underestimating, especially on the corporate tax side, that thanks to the new depreciation schedules our effective corporate tax rate, not the statutory, but the effective, will drop to one of the lowest in the world at roughly 10%, certainly near a record low for the U.S.
So do you think, Cathy, that's not priced in yet to U.S. equities? Like have investors not realized that and therefore it's not priced in yet?
You know, it's very interesting. Maybe a lot of your guests have been talking about the depreciation schedules, how how massively they are going to encourage capital investment here in the United States. So we've never had full depreciation in year one of manufacturing facilities, full depreciation in the first year of service. That means corporations will get huge tax refunds that they will be able to reinvest into innovation because we also equipment, domestic R&D and software. Those three, full depreciation, first year of service, that has been legislated. Normally we get, oh, a few years of this, you know, this cut and that cut. But that has been legislated. Now it's all the time. So we don't think people understand how profound some of these tax changes are.
So what does that mean for something like the AI trade specifically, Kathy, where I think people are worried about pockets of it being in a bit of a bubble? Does it benefit everyone who is somehow associated, whether it's the chip companies, whether it's the energy companies? Do you see the benefits playing out there and giving it more room to move to the upside?
Absolutely. Absolutely. I mean, we're having huge buildouts of data centers and power facilities. All of those depreciation schedules will apply to this boom in investment and contribute to it. So, yes. In fact, Carol, I was just going to say, many people think we're in a bubble. And yes, the data center spending last year was about $500 billion. And you can see all of this in our Big Ideas report. We just released it yesterday. And thank you, Bloomberg, for featuring it. But $500 billion is a two and a half times increase from where it had been trending for years. So big increase, no doubt about it. But we think that number needs to go to $1.4 trillion in the next five years to accommodate the AI boom that is now underway and is going to drive productivity gains incredibly.
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Chapters
4 chapters
1
What is the main topic discussed in this episode?
0:02–0:44
2
What are Cathie Wood's predictions for the economy by 2026?
0:44–7:31
3
How does deregulation impact investment opportunities in the U.S.?
7:31–15:20
4
What are the implications of full depreciation for corporate investment?
15:20–17:47
Speakers
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