ARK Invest CEO Cathie Wood countered investor Bill Ackman‘s late-1970s inflation comparison by pointing to the 1980s technology revolution, defending her firm’s forecast for high single-digit real GDP growth.
1980s Tech Revolution Parallels
Ackman recently posted concerns about inflation and interest costs reminiscent of the late 1970s, Wood noted. In a video broadcast of her ‘In The Know’ podcast and social media post, Wood stated that she believes the current economic environment will play out similarly to the 1980s.
During the 1980s, “real growth picking up thanks to productivity” and falling inflation were driven by a “technology revolution really started by the PC and then software,” Wood said.
In the Oct. 3 X post, Wood argued that five major technologically enabled innovation platforms—including artificial intelligence, robotics, and energy storage—will drive inflation down to lower levels than most investors expect.
Defending the ‘Crazy’ Forecast
Based on this technological shift, Wood stated her firm forecasts real GDP growth to reach the high single-digit range. “Most people think our forecast for high single-digit real GDP growth is crazy,” Wood wrote in a post on X, acknowledging that the world has historically operated in a roughly 3% global growth environment.
However, Wood highlighted that the cost of AI inference is dropping “99.99% per year” at a fixed performance level. Wood noted that OpenAI’s annualized revenue run rate jumped from $20 billion to $70 billion, demonstrating that as prices fall, demand explodes. Wood stated that these cost declines will seep into the broader economy, pushing inflation lower while lifting profitability.
Good Deflation
Rather than fearing falling prices, Wood categorized the current technological impact as beneficial. Wood stated that this technological convergence will result in “good deflation, meaning it causes a boom in growth.”
If oil demand peaks and prices drop into the $30 to $35 range due to electric transportation adoption, Wood added that the economy could experience actual deflation.
In this scenario, interest rates could still rise because “real growth is stronger,” Wood explained, noting that current interest rates are being influenced more by real growth than by inflation.
How Has the Stock Market Performed in 2026?
The S&P 500 index has advanced 13.35% year-to-date. Similarly, the Nasdaq Composite index was up 18.26%, and the Dow Jones gained 5.96% YTD.
On Monday, the SPDR S&P 500 ETF Trust (NYSE:SPY) and Invesco QQQ Trust ETF (NASDAQ:QQQ), which track the S&P 500 and Nasdaq-100, respectively, closed higher. SPY rose 0.67% to $774.83, while QQQ rose 0.88% to $756.20. Meanwhile, the Dow tracker, State Street SPDR Dow Jones Industrial Average ETF Trust (NYSE:DIA), ended 0.20% higher at $512.11.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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