Cathie Wood is making another bold call on the U.S. economy and stock market.

In a 2026 outlook letter published on Jan. 15, the ARK Invest founder and CEO says the U.S. economy is storing up energy for a sharp rebound. 

“Despite sustained real gross domestic product growth during the past three years, the underlying U.S. economy has suffered a rolling recession and has evolved into a coiled spring that could bounce back powerfully during the next few years,” she said.

Wood said post-Covid high interest rates squeezed the economy, hitting housing, manufacturing, and non-AI investment. But she is optimistic that easing rates and rising productivity could release growth potential.

Wood wrote in a post on X (the former Twitter) that the next three years could look like “Reaganomics on steroids,” which she believes could lead to “another golden age” for the U.S. stock market.

“Early in my career, I remember how deregulation, tax cuts, sound monetary policy, and peace through strength sent the dollar soaring, which put a lid on the gold price,” she explained.

In the Reagan era, a mix of those forces helped the market enter a long bull that ran through much of the 1980s and 1990s.

“The Trump Administration’s policies are echoing the early days of Reaganomics in the 1980s, when the dollar nearly doubled,” Wood said.

Cathie Wood gained a reputation after the Ark Innovation ETF delivered a 153% return in 2020.

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The ups and downs of Cathie Wood’s strategy

Wood focuses on emerging high-tech companies in areas including artificial intelligence, blockchain, biomedical technology, and robotics.

She gained a reputation after the Ark Innovation ETF delivered a 153% return in 2020. In 2025, the flagship Ark Innovation ETF (ARKK) is up 35.49%, far outpacing the S&P 500’s return of 17.88% in the same period.

Top 10 holdings of the Ark Innovation ETF as of Jan. 16, 2026:

  • Tesla (TSLA): 10.14%
  • CRISPR Therapeutics (CRSP): 5.29%
  • Roku (ROKU): 5.09%
  • Coinbase Global (COIN): 5.07%
  • Tempus AI (TEM): 4.98%
  • Shopify (SHOP): 4.67%
  • Robinhood Markets (HOOD): 4.06%
  • Beam Therapeutics (BEAM): 3.79%
  • Palantir Technologies (PLTR): 3.57%
  • Roblox (RBLX): 3.54%

Wood’s style brings sweet wins in rising markets but also painful losses in bearish ones, as seen in 2022, when the Ark Innovation ETF tumbled more than 60%.

Those swings have weighed on Wood’s long-term results. As of Jan. 16, the Ark Innovation ETF has delivered a five-year annualized return of -10.31%, while the S&P 500 has an annualized return of 14.66% over the same period, according to data from Morningstar.

From 2014 to 2024, the Ark Innovation ETF wiped out $7 billion in investor wealth, according to an analysis by Morningstar’s analyst Amy Arnott. That made it the third-biggest wealth destroyer among mutual funds and ETFs in Arnott’s ranking.

Wood rejects “AI bubble” again

In terms of the stock market into 2026, Wood once again rejects the AI bubble talk, saying it “is years away” and “the most powerful capital spending cycle in history” is coming.

“What once was the cap in spending seems to have become a floor now that the AI, robotics, energy storage, blockchain technology, and multiomics sequencing platforms are ready for prime time,” she said.

Related: Fund manager lays out surprisingly bullish S&P 500 target for 2026

Wood noted that consumers today are adopting AI at twice the pace they adopted the internet in the 1990s, with 2026 likely to bring better user experiences, including use cases such as ChatGPT Health.

“This year should see material steps forward on [the AI] front through user experiences that are more intentional, intuitive, and integrated,” she wrote.

Wood also revisited Bitcoin and gold. While gold surged 65% in 2025 and Bitcoin slipped 6%, Wood highlighted Bitcoin’s role as a portfolio diversifier.  

“The correlation between Bitcoin and gold is lower than that between the S&P 500 and bonds,” Wood said. “In other words, bitcoin should be a good source of diversification for asset allocators looking for higher returns per unit of risk during the years ahead.”

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