Cathie Wood anticipates AI and Bitcoin will fuel a new era of economic expansion in the U.S.

The CEO of Ark Invest, Cathie Wood, stated that the U.S. economy is moving away from a lengthy “rolling recession” and is entering a phase of growth driven by productivity improvements. This transformation is being fueled by advancements in artificial intelligence, digital currencies, and automation.

Wood observes that after enduring almost three years of sector-specific slowdowns caused by stricter monetary policies, the economy is showing signs of stabilization and growth once again.

Her positive outlook is based on the accelerating influence of AI and automation across various sectors, which she believes will lower costs, enhance productivity, and help maintain inflation control even as economic growth resumes.

AI and automation

She connects the expected economic recovery to significant changes occurring in both public and private sectors, propelled by generative AI and machine learning innovations.

These advancements are reducing the labor intensity in knowledge-heavy industries, shortening project timelines, and allowing human resources to focus on more valuable tasks.

As an illustration, she pointed to developments within the U.S. Food and Drug Administration, where AI technologies are streamlining multi-day processes into mere minutes, indicating a substantial increase in productivity within the government sector.

She also highlighted that similar advancements are gaining traction in finance, legal fields, logistics, and healthcare, where AI is becoming integral to their main operations.

Wood asserts that this rise in digital productivity will enhance corporate profit margins and exert a deflationary effect, counteracting the inflationary pressures typically associated with growth. By automating mundane tasks and speeding up decision-making, businesses can scale more efficiently without a corresponding rise in input costs.

She believes that this growth phase, unlike previous ones driven by consumer spending or credit expansion, will be anchored in real efficiency improvements. According to her, the U.S. is entering a new investment environment where declining inflation expectations correspond with swift innovation, creating a favorable landscape for long-term capital.

Bitcoin and Tesla

Central to her projections is Bitcoin (BTC), which Ark sees as a revolutionary financial asset. The firm holds a long-term price target of up to $1.5 million per coin.

This optimistic forecast is underpinned by increasing institutional involvement, Bitcoin’s function as a digital store of value, and its significance in regions with volatile currencies.

Tesla continues to be among Ark’s top preferred investments, with a projected five-year price target of $2,600 per share for the electric vehicle manufacturer. This target is based on anticipated advancements in autonomous ride-hailing services and developments in self-driving technology.

Wood also identifies significant potential in Tesla’s robotics division, suggesting that humanoid robots could unlock a global market worth trillions of dollars.

She believes Tesla’s competitive advantage stems from the concurrent progress in three essential technology areas: robotics, AI, and energy systems, placing it in a strong position within global innovation.

Ark has additionally increased its investments in semiconductor and biotechnology companies that align with enduring technological advancements.

Wood foresees a comprehensive transition from economic stagnation to a period characterized by rapid innovation, scalable productivity, and sustainable development.