Ark Invest CEO Cathie Wood warns of potential AI market correction: ‘A reality check is coming'

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ARK Invest CEO Cathie Wood on Tuesday dismissed concerns of an AI bubble but cautioned that AI valuations could face a “reality check.”

Speaking to _CNBC_’s Dan Murphy on the sidelines of Saudi Arabia’s Future Investment Initiative (FII) in Riyadh, Wood said that as interest rates begin to rise, “there will be a shudder” in markets.

“We are going to reach a moment in the next year where the conversation will shift from lower interest rates to rising rates,” the closely watched investor said.

“People think innovations and interest rates are inversely correlated. That’s not true over history,” Wood said. “I want to disabuse people of that notion. But nonetheless, we think there will be a reality check.”

Her remarks come amid worries over rising tech valuations as companies and investors continue to pour funds into the sector.

Cathie Wood's Ark Invest has, however, made a series of high-profile portfolio moves focused on innovation and technology stocks. The most notable investments included significant purchases in Robinhood Markets (HOOD [https://seekingalpha.com/symbol/HOOD]), Netflix (NFLX [https://seekingalpha.com/symbol/NFLX]), and Baidu (BIDU [https://seekingalpha.com/symbol/BIDU]), while the funds also made notable sales, such as Shopify (SHOP [https://seekingalpha.com/symbol/SHOP]) and Advanced Micro Devices (AMD [https://seekingalpha.com/symbol/AMD]) shares.

Ark Invest sold 4,064 shares of Palantir Technologies (PLTR [https://seekingalpha.com/symbol/PLTR]) in October.

The International Monetary Fund, Bank of England, and Federal Reserve Chair Jerome Powell have also warned about the risk of a stock market correction as AI spending surges.

MORE ON ARK INVEST, ETC.

* ARK Innovation ETF: Time To Go All In [https://seekingalpha.com/article/4829005-ark-innovation-etf-time-to-go-all-in]
* ARKW: Curb Your Enthusiasm, This ETF Is Up 100% But Not That Unique [https://seekingalpha.com/article/4826309-arkw-curb-your-enthusiasm-this-etf-is-up-100-percent-but-not-that-unique]
* ARKK: Trading Into The Wind [https://seekingalpha.com/article/4826000-arkk-trading-into-the-wind]
* Cathie Wood's weekly recap: sells AMD, Shopify, builds exposure in Chinese AI, biotech & Netflix [https://seekingalpha.com/news/4508473-cathie-woods-weekly-recap-sells-amd-shopify-builds-exposure-in-chinese-ai-biotech-netflix]
* Buying the dip: Cathie Wood adds Netflix to her portfolio [https://seekingalpha.com/news/4507484-buying-the-dip-cathie-wood-adds-netflix-to-her-portfolio]