Ark Invest: Blockchain and artificial intelligence are the key to revitalizing the economy

Source: Blockchain Knights

"Technological innovation, especially artificial intelligence and blockchain technology, may be the key to revitalizing the global economy," ARK Investments said in its third-quarter report.

ARK believes that five major innovation platforms (robotics, energy storage, artificial intelligence, blockchain and multi-organism analysis sequencing) may have a significant impact on macroeconomic indicators in the next five to ten years as inflation in several fields turns to deflation.

The company's CEO and CIO Catherine Wood pointed out that the convergence of these technologies is expected to drive significant economic growth.

"Interest rates may exceed expected lower levels, thereby expanding the stock rally beyond a few stocks and reinforcing the need for diversified artificial intelligence investments," Wood said.

Wood believes that the most promising artificial intelligence investment opportunities lie in disruptive innovation, which has the potential to bring more diversified market leaders as the current concentration of equity ownership decreases.

ARK's research shows that the economy has been experiencing a rolling recession since the Federal Reserve began raising interest rates in early 2022.

To address these economic challenges, artificial intelligence and blockchain technologies are important in driving productivity growth, creating new products and services, and more.

Using these innovative technologies, companies can alleviate profit pressures from declining pricing power and inflationary trends.

The ARK Next Generation Internet ETF outperformed global stock indices in the third quarter, thanks to holdings in companies such as Tesla and Palantir Technologies.

Palantir previously reported second-quarter earnings, with its U.S. commercial revenue growth accelerating from 40% to 55% year-over-year, which had a positive impact on the company's stock price.

Palantir's AI platform bootcamp has brought great value to customers, prompting the company to raise its full-year performance guidance.

On the contrary, some companies are facing challenges. Pager Duty's stock performance was affected by management's reduction of full-year revenue guidance due to extended sales cycles.

However, the company is still expected to achieve its scheduled annual recurring revenue growth target, driven by increased adoption of its AI-driven operations and customer service products.

ARK highlights that inflation, initially triggered by supply shocks, has evolved into deflation and may ultimately lead to disinflation.

The company believes that technological advances in artificial intelligence and blockchain will play an important role in this transformation.

As companies lose pricing power and face margin pressure, those that actively adopt AI technologies may improve productivity and innovate new solutions, potentially offsetting the impact of the recession.

The bond market has been a signal of potential economic weakness, with indicators such as the inverted yield curve pointing to a possible economic downturn.

In this context, ARK emphasizes the strategic importance of investing in artificial intelligence and blockchain technologies.

The company believes that these innovations can drive economic recovery and reshape market forces by introducing new industry leaders.