21 October 2024 – Cathie Wood, Founder and CEO of ARK Invest, predicts that the “truth will win out“ for genomics stocks and she has urged investors to look for innovative companies outside of broad-based benchmarks such as the S&P 500 or Nasdaq.
Speaking on eToro’s Digest & Invest podcast to eToro CEO Yoni Assia, Cathie Wood discussed how following benchmarks alone could be a handicap to investors looking for sizeable growth.
Cathie Wood said: “Sure, [investors may] have a lot of innovation with the usual suspects in the broad-based benchmarks, but they are lacking the companies that are going to be much more transformational. If we are right, then they are probably short truly disruptive innovation.”
Wood singled out the genomics industry as one which investors are in danger of overlooking with a benchmark-focused approach, noting that a reduction in AI training costs is driving up productivity in this burgeoning sector.
Cathie Wood said: “We’re beginning to see the convergence of sequencing and artificial intelligence and CRISPR gene editing to cure disease… The seeds have been germinating for 25, 30 years and now they are flourishing, and yet investors are fearful and they’re hugging their benchmarks really closely.
“When it’s all happening, we are ready for prime time. Truth will win out. These stocks are going to be incredibly profitable with time. They’re still in the investment stage now, but I think that for those who avoid these stocks, that will end badly as well.”
One of the genomics companies in the portfolios of Wood’s investment management firm, ARK Invest, is CRISPR Therapeutics. The stock is down over 25% year-to-date.
Explaining that the price slump is due to the delay in the firm receiving reimbursement for treatments delivered, Cathie Wood said: “That’s what we’ve been through in this algorithmically driven market where the companies that are not generating a lot of cash flow [get dropped]. The markets have been in this interest rate higher-for-longer funk. That is now starting to change.”
The Digest & Invest podcast offers listeners financial news and market insights in a fun and digestible format. You can listen to the interview with Cathie Wood here.
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