'Investors should expect 'strong deflationary pressures' – Ark Invest's Cathie Wood'

 Cathie Wood, CEO and CIO of ARK Invest, predicts SpaceX (SPACEX) could become the first trillion-dollar company, with its latest funding round, valuing the company at approximately $800B.

Wood pointed to a new opportunity driving this potential: data centers in space that could help the company avoid the “not in my backyard” obstacles facing other tech infrastructure projects.

In a recent interview with CNBC, Wood outlined her bullish outlook for 2026, emphasizing that deflationary pressures are stronger than many analysts recognize. She cited declining oil prices (CL1:COM), (CO1:COM), falling housing costs—noting that KB Home (KBH) has cut prices by 7% with others following—and significant productivity gains as key factors.

“We think the surprises are going to be on the low side of inflation expectations,” Wood said.

In addition, technology (XLK), (IYW) remains central to ARK’s deflationary thesis. The firm focuses exclusively on five platforms of “technologically enabled innovation”: robotics, energy storage, artificial intelligence, blockchain technology, and multiomic sequencing in health care. Wood noted that unit labor costs have declined dramatically, turning negative in the most recent quarter reported.

Despite the market trading near record-high valuations, Wood remains optimistic, pointing to historical precedents in the 1990s and early 2000s when strong markets continued even as valuation multiples compressed. ARK’s approach assumes valuations will compress, building this expectation into their bottom-up analysis for every company.

On Tesla (TSLA), Wood acknowledged that the EV sales environment has been challenged but said the market is shifting its focus to the robotaxi opportunity. This transition moves Tesla (TSLA) from a hardware business with 15% gross margins toward a software-as-a-service model where recurring revenue margins reach into the 70s and 80s.

Wood suggested the proliferation of robotaxis will happen faster than most analysts expect, particularly if federal legislation advances beyond the current state-by-state approach.

However, she tempered expectations for Tesla’s (TSLA) Optimus robot, noting that ARK’s analysis concludes it is 200,000 times more difficult to develop than a robotaxi, though simpler robotic applications for picking, packing, and lifting are already “starting to make waves.”

https://www.msn.com/en-us/money/markets/investors-should-expect-strong-deflationary-pressures-ark-invest-s-cathie-wood/ar-AA1UmleW