March mARKet Update Webinar Summary

In ARK’s March mARKet Update Webinar, CEO and CIO Cathie Wood and members of the ARK team addressed macroeconomic developments, the outlook for Tesla, cryptocurrency markets, healthcare innovation, space exploration, and international trends in artificial intelligence. The conversation reflected ARK’s forward-looking research and conviction in the convergence of technologies shaping the global economy. A summary of the key questions and perspectives discussed follows below. For additional insights, please view the full March Fund mARKet Update Webinar here.

What is your outlook for the rest of 2025 and beyond?

Cathie Wood opened the webinar by reiterating her view that the US economy is completing a rolling recession that began in 2022. While fears of economic contraction and policy uncertainty persist, ARK expects the combination of lower inflation, declining long-term interest rates, and fiscal stimulus from the new administration to provide meaningful degrees of freedom to both the Federal Reserve and policymakers. Cathie highlighted that recent market weakness likely has priced in much of the near-term risk, and that the setup for financial markets in the second half of 2025 could be favorable—especially as the productivity gains from innovation platforms like AI, robotics, energy storage, and multiomics begin to materialize. Cathie also noted that a potential currency devaluation by China could serve as a deflationary force, and that anticipated tax cuts, if implemented quickly, may provide additional tailwinds to markets.

What will it take for Tesla’s stock to rebound, and how do you manage its volatility in the portfolio?

Cathie and the Autonomous Technology and Robotics team addressed multiple facets of Tesla's outlook, beginning with its potential path to recovery in equity markets. While near-term concerns about Elon Musk’s political involvement and slowing electric vehicle (EV) demand have weighed on sentiment, Cathie emphasized that the primary drivers of value are still innovation and execution. The anticipated launch of Tesla’s lower-cost vehicle and the rollout of its robotaxi platform—expected to begin in Austin as early as June—could be pivotal catalysts.

Sam Korus, Director of Research, Autonomous Technology and Robotics, clarified that the sale of human-driven EVs make up only a small fraction of ARK’s valuation for Tesla. The majority of ARK’s projected enterprise value for Tesla over the next five years instead tied to the autonomous offering. Tasha Keeney, Director of Investment Analysis & Institutional Strategies, expanded on the idea, citing Tesla’s planned launch of its Full Self-Driving software (FSD v13)-enabled robotaxi platform, emphasizing its potential to transform Tesla’s business model into a high-margin, software-as-a-service-like structure. Tasha noted that Tesla's access to more than 10 million miles of real-world autonomous driving data provides a significant edge over competitors like Waymo, which has only a fraction of that data. On safety, she shared that Tesla’s FSD has proven to be five times safer than manual driving and that the company could surpass the US crash average of 700,000 miles per incident as early as this year.

Cathie reiterated her confidence in Elon Musk’s management approach, explaining that he is supported by top engineering and business talent and highly focused on eliminating bottlenecks. She also addressed ARK’s portfolio management strategy, stating that ARK has traded around Tesla’s volatility successfully, tactically taking profits near $500 per share and redeploying capital during subsequent pullbacks—moves that have generated alpha over time.

Are we at the beginning of a cryptocurrency bear market?

Director of Digital Assets Lorenzo Valente explained that ARK does not believe the crypto market is entering a bear phase. Instead, he characterized recent volatility as typical of bull markets, where 30-35% drawdowns are common. He noted that bitcoin has outperformed significantly over the past year, benefiting from growing institutional flows and regulatory clarity, including the US government's new crypto asset reserve and clearer banking guidance from the Office of the Comptroller of the Currency (OCC).

Lorenzo also addressed Ethereum and Solana, noting that Ethereum has underperformed because of governance and value accrual concerns, while Solana has faced pressure related to FTX bankruptcy proceedings. Still, fundamentals remain strong across many protocols, with increasing revenue generation and attractive valuations. Lorenzo concluded by noting that AI-driven token generation is adding complexity to the space and that the market could consolidate meaningfully this year.

Can you provide updated thoughts on Recursion?

Research Analyst Nemo Marjanovic, PhD described 2024 as a breakthrough year for Recursion, which has shown early clinical efficacy in multiple programs, including a best-in-class CDK4/7 inhibitor and a treatment for cerebral cavernous malformations. He emphasized Recursion’s scale advantage, powered by its multimodal data platform and BioHive 2 supercomputer, and highlighted recent performance milestones in its partnerships with Roche and Sanofi. The company’s integration with xAI already is delivering material improvements in discovery efficiency, the development of its “virtual cell” a major step toward simulating biology and accelerating drug development. Nemo called Recursion the "Tesla of multiomics"—a company with the potential to redefine drug discovery through automation and AI.

What kind of progress do you see in space exploration over the next few years?

Sam Korus emphasized that the industry is approaching a major inflection point driven by the rapid reusability of rockets. SpaceX has led the way, but several other companies—including Rocket Lab, Stoke Space, and Blue Origin—are working to follow suit. The next phase of reusability should continue to drive down launch costs and expand the viability of space-based applications, including communications, research, and exploration. Sam expects meaningful activity in low-Earth orbit and potential Starship missions to Mars within the next two years.

Compared to other ARK ETFs, why hasn’t ARKG recovered post-2022 drawdown? What might drive a recovery?

Cathie acknowledged that ARKG has underperformed relative to other ARK strategies, in part because the multiomics and genomic revolution remains in an early stage of development. Many companies in the fund are reinvesting for long-term growth and are not yet cash flow positive—a dynamic that has been punished in the current rate environment. That said, Cathie believes this dynamic is changing. She emphasized that the political environment is turning favorable, with strong interest in cost-saving cures, and that ARK expects a re-rating of the sector as the value of therapeutic breakthroughs becomes more widely understood. She noted that several companies in the portfolio, including CRISPR Therapeutics and Tempus, are delivering commercial therapies already and that the entire ecosystem—from diagnostics to enabling technologies—is positioned for a structural shift from sick care to real healthcare.

Nemo added that ARKG is designed to support that healthcare transition, with exposure not only to gene editing companies but also to the diagnostic and infrastructure layers necessary to enable widespread therapeutic delivery. Cathie concluded that, much like ARK’s early and growing conviction in Tesla during periods of controversy, ARK views the multiomics opportunity with a similarly long-term perspective.

How does UAE’s rapid AI adoption and 5G infrastructure affect your tech growth projections?

Frank Downing, Director of Research, Next Generation Internet, explained that the United Arab Emirates (UAE) and broader Middle East are emerging as early backers of alternative semiconductor and AI infrastructure. He cited investments in companies like Cerebras and Groq—both developing architectures that compete with Nvidia—as evidence that the region is taking calculated risks in emerging technologies. The UAE’s willingness to fund early-stage players could enable more diverse AI ecosystems globally. On 5G, Frank noted that while terrestrial telecom infrastructure is not a major limiting factor for ARK’s innovation platforms, satellite networks like Starlink could present more meaningful disruption potential in the years ahead.

Conclusion

This month’s discussion highlighted ARK’s conviction in the innovation platforms reshaping the global economy—from AI-enabled data platforms to autonomous mobility, crypto infrastructure, multiomics, and space. While macroeconomic volatility remains a near-term challenge, ARK continues to see long-term opportunity in technologies that are converging to unlock exponential growth and productivity across sectors.

Stay tuned to our In The Know video series for deeper insights about deflation, innovation, and macroeconomic developments.

Important Information

The information provided in this material is for informational purposes only and should not be used as the basis for any investment decision and is subject to change without notice. It does not constitute, either explicitly or implicitly, any provision of services or products by ARK, and investors should determine for themselves whether a particular investment management service is suitable for their investment needs. All statements made regarding companies or securities are strictly beliefs and points of view held by ARK and are not endorsements by ARK of any company or security or recommendations by ARK to buy, sell or hold any security. Historical results are not indications of future results. 

Certain of the statements contained in this material may be statements of future expectations and other forward-looking statements that are based on ARK's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. ARK assumes no obligation to update any forward-looking information. ARK and its clients as well as its related persons may (but do not necessarily) have financial interests in securities or issuers that are discussed. Certain information was obtained from sources that ARK believes to be reliable; however, ARK does not guarantee the accuracy or completeness of any information obtained from any third party.

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