Ark CEO Wood: AI technology innovation stocks welcome a new wave of outbreaks, Trump tariffs reshape the global economy

Catherine Wood, founder of ARK Invest, expressed her views on the state of the economy in 2025 on 3/9, noting that the U.S. economy may be in the final stages of a rolling recession (Rolling Recession), and predicting that technological innovation will drive productivity growth and bring new economic prosperity. However, the current market is still in uncertainty, including the direction of monetary and fiscal policy (FED) by the Federal Reserve, and the rapid development of AI technology, which may have a profound impact on the market.

U.S. GDP fell 3%, and a rolling recession entered its final phase

Citing the latest GDP Now indicator from the Atlanta Fed Bank (Atlanta Fed), Wood shows that GDP could fall by 3% annualized in the first quarter of 2025. The data alarmed the market, as many believed that the US economy would be quite stable. However, Wood believes that the US economy has entered a rolling recession since the Fed launched its rate hike cycle in 2022, and this process is now coming to an end.

She pointed out that while the market may remain volatile in the short term, companies are already adapting to the new economic environment, and GDP growth is likely to accelerate in the future as productivity increases, while inflationary pressures will continue to decline.

The $4.5 trillion tax cut plan debuted, and the market expected a policy boost

In terms of fiscal policy, Wood believes that the most noteworthy is the $4.5 trillion tax cut plan promoted by the US government. She analyzed that the House of Representatives has passed the plan, and it may be retroactively applied to January 20, 2025, which is the official inauguration date of Trump, to avoid the risk of an economic slowdown that "delays investment while waiting for tax cuts".

In addition, the Trump administration plans to eliminate tipping, overtime pay and Social Security (Social Security) income tax, which will especially benefit low- and middle-income groups and avoid criticism that the government "only cares for the rich." However, the market is still concerned about whether the tax cuts will further widen the fiscal deficit, and Wood believes that by boosting productivity and stimulating economic growth, tax cuts can be promoted without affecting the fiscal balance.

The surge in imports has affected GDP, and consumer confidence remains subdued

According to Wood's analysis, U.S. imports surged 11%-12% in January 2025, negatively impacting GDP in the short term. However, as imported goods gradually turn into consumption or inventories, the next few months may see a corresponding economic upturn.

On the other hand, consumer confidence remains fragile. The recent University of Michigan Consumer Confidence Index shows that the confidence of high-income groups has also begun to waver, which is related to increased market uncertainty, such as tax rate changes, government policy adjustments, and AI technology may replace some jobs. Retailers such as Walmart (Walmart), Target and Costco have warned of weaker consumer demand, further deepening market concerns.

The dollar, tariffs and inflation, the government revenue model is being reshaped

Wood also analyzes the role of tariffs in U.S. finances. She noted that the Trump administration wants to raise tariffs to cover the fiscal gap created by the tax cuts, similar to early U.S. history, when the administration relied primarily on tariff revenues rather than income taxes. However, it could also lead to the depreciation of other countries' currencies to offset the impact of tariffs, such as China's response to U.S. tariffs by devaluing the renminbi during Trump's first term.

On the other hand, the market is still watching the inflation trend, and although the FED hopes to push inflation back below 2%, it is still affected by the expected price increase of enterprises, which has led to an early increase in the price of some commodities. However, Wood expects money supply growth to slow, currently at 3.9% a year, a trend that will eventually depress inflation and return the economy to steady growth.

AI technology and the future economy, the productivity revolution is coming

In particular, Wood emphasized that AI technology will be a key force in driving productivity growth and could usher in a new golden age for the U.S. economy. Citing historical data, she pointed out that whenever major technological innovations such as electricity, automobiles, telephones, etc., the economic growth rate will increase significantly, and the current development of AI and related technologies may even exceed the previous speed.

She believes that future annual U.S. GDP growth could reach 7.3%, much higher than the average of 3% over the past 15 years. Such an increase would not only compensate for the fiscal impact of the tax cuts, but could also propel the stock market into a new bull market.

ChatGPT still dominates, and DeepSeek and Grok rise

Wood also shared current AI market trends, arguing that ChatGPT is still the most used AI model in the world, but DeepSeek and Grok are also rapidly emerging as major players in the market.

In particular, DeepSeek's technological innovation has attracted attention from Silicon Valley, including Huida (NVIDIA) CEO Jensen Huang, OpenAI CEO Sam Altman, and Musk (Elon Musk) have all praised its technical performance. In addition, Grok's active users are growing even faster than DeepSeek, indicating that market acceptance of new AI models is increasing.

The market is about to recover, and AI and tax cuts are key

In summary, Wood believes that although the U.S. economy will still be volatile in the short term, the next few years may usher in strong economic growth as the rolling recession ends, AI technology drives productivity improvements, and tax reform stimulates the market. In addition, with the popularization of AI technology, the market structure will be further transformed, and real scientific and technological innovation stocks will usher in a new round of outbreaks.

( stock god Warren Buffett rarely despises politics! Commenting on Trump's tariff policy: to some extent the act of war )

This article by Ark CEO Wood: AI technology innovation stocks welcome a wave of outbreak, Trump tariffs reshape the global economy first appeared in Chain News ABMedia.