Q4 Update Webinar Summary

In ARK Invest’s Q4 2024 Update Webinar, CEO and CIO Cathie Wood and members of the investment team shared valuable insights on the evolving economic landscape, the impact of the new US administration, and emerging investment opportunities across disruptive innovation platforms. The discussion covered topics ranging from macroeconomic policy shifts to developments in artificial intelligence, genomics, and space exploration. Below, we provide a summary of the key questions addressed during the webinar and ARK’s perspective on each. This article summarizes our perspectives on key questions asked prior to the webinar. For additional insights, we invite you to view the full Quarterly Update Webinar here.

With Trump back in office and the GOP’s focus on cost reduction, how do you think this will impact the overall market?

Cathie Wood highlighted the potential market impact of the new administration’s emphasis on spending reductions and regulatory reform, which could pave the way for lower taxes and a more business-friendly environment. She noted the potential for a shift in investor sentiment, drawing parallels to the economic boom of the 1990s, which occurred under a similar fiscal policy backdrop. While acknowledging market uncertainty, Cathie expressed optimism that a rollback of regulations, particularly in innovation-driven sectors, could unlock new growth opportunities and enhance productivity. She also cautioned that the market will be closely watching the administration’s ability to follow through on spending cuts and regulatory changes.

How have Bitcoin and your views evolved now that the spot ETPs have been available for a year?

David Puell, Research Trading Analyst/Associate Portfolio Manager for ARK’s Digital Assets team, provided an in-depth analysis of Bitcoin’s trajectory following the launch of spot Bitcoin ETPs, which have contributed to broader institutional adoption and market maturity. He identified three key trends shaping Bitcoin’s future: increased accessibility and adoption, a more favorable regulatory framework, and the evolution of active management strategies tailored to Bitcoin’s unique characteristics. With bipartisan support for clearer regulation, upcoming legislative developments like the Financial Innovation and Technology Act, the Payment Stablecoin Act, and the Bitcoin Strategic Reserve Act are expected to create further tailwinds for the digital asset space.

Why do you hold ARKB in some funds but not in ARKK?

Cathie explained ARK’s strategic approach to allocating Bitcoin exposure across its funds. While ARK maintains a high level of conviction in Bitcoin's long-term potential, ARKB is included in ARKF and ARKW because of its direct relevance to fintech and next-generation internet themes. In contrast, ARKK, as a generalized innovation fund, maintains exposure to blockchain technology through companies like Coinbase and Block, offering indirect exposure rather than direct Bitcoin holdings. This approach allows investors to tailor their exposure to digital assets based on their specific investment objectives.

Do you think China’s breakthrough in low-cost AI models will impact the current trends in AI investment?

Frank Downing, Director of Research for ARK’s Next Generation Internet team, addressed recent advancements in AI models from China, particularly DeepSeek’s latest release, which has demonstrated impressive cost efficiency in training models. He noted that those developments underscore China’s growing focus on software-driven innovations, driven in part by constraints on high-end semiconductor access. While the cost reductions achieved by Chinese AI firms are noteworthy, Frank emphasized that innovation in AI remains highly competitive and dynamic, with Western firms continuing to push the boundaries of model capabilities and application scope. Cathie added that regulatory and geopolitical factors will continue to shape investment trends in AI.

Genomics was a major laggard in 2024. What gives you confidence that 2025 will be better?

Chief Futurist Brett Winton and Multiomics Research Analyst Nemo Marjanovic shared their optimism for the genomics sector in 2025, citing the convergence of advanced genomics tools, AI-driven analytics, and a favorable regulatory environment. They highlighted the increasing role of big tech in healthcare, with companies like NVIDIA and Google DeepMind investing heavily in AI applications for drug discovery and diagnostics. Additionally, they anticipate that potential deregulation under the new administration will accelerate innovation and capital inflows into the sector. Brett also noted that improving cost dynamics and faster drug development timelines will make genomics companies more attractive investment opportunities in the coming years.

Given that space is not exactly human-friendly, has Elon ever mentioned making use of Optimus bots in SpaceX's efforts/projects off-planet?

Sam Korus, Director of Research for ARK’s Autonomous Technology & Robotics team, confirmed that Elon Musk has discussed publicly deploying Optimus robots on uncrewed Starship missions as early as 2026. The plan includes using humanoid robots to assist with various tasks like site preparation and infrastructure development in preparing for human missions. If successful, Optimus robots could play a critical role in enabling sustainable off-planet operations, providing a unique synergy between SpaceX’s space exploration goals and Tesla’s robotics advancements.

What is your view on AST SpaceMobile?

Sam Korus provided insights into AST SpaceMobile’s potential within the growing space economy, emphasizing its ambitious goal of delivering direct-to-device connectivity without requiring hardware modifications. While AST has secured significant partnerships with telecom giants like AT&T and Verizon, Sam noted that the competitive landscape is evolving rapidly, with SpaceX’s Starlink posing a formidable challenge. ARK continues to monitor AST’s progress closely, evaluating its potential to scale effectively and capture market share in the expanding satellite communications industry.

I understand why Tesla is a large weight in ARKQ, but why is it nearly the same in ARKK?

Cathie clarified that Tesla represents the convergence of multiple innovation platforms, including robotics, energy storage, and artificial intelligence, making it a cornerstone investment across multiple ARK strategies. She emphasized that Tesla’s leadership in autonomous driving and its potential in humanoid robotics position it uniquely within the portfolio. With the imminent rollout of Tesla’s autonomous strategy, Cathie expressed confidence that analysts will need to adjust their valuation models to reflect the company’s growing AI-driven capabilities.

Conclusion

The Q4 2024 Update Webinar provided a comprehensive look at ARK’s investment outlook as we enter 2025. With shifting macroeconomic policies, accelerating technological innovation, and improving regulatory clarity, ARK remains focused on identifying and investing in companies at the forefront of disruptive innovation. As the investment landscape evolves, ARK continues to see significant opportunities across AI, genomics, space exploration, and digital assets.

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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