Smaller cap technology stocks offer a “unique opportunity” for outsized returns in the coming years, while the “Magnificent Seven” come under greater threat, says Cathie Wood, the CEO of ARK Invest.
In an Opinion article, Wood argues a wave of innovation is washing over the global economy and it is “faster, bigger, and stronger than at any other point in history”.
AI is a catalyst and it powers a wider convergence among other technologies, including public blockchain.
“Technologies previously slated for commercialisation well into the 2030s are now on track to be rolled out by the end of this decade”, she writes.
Adding that there is a “massive overuse” of market-cap weighted benchmarks such as the S&P 500 in the markets today, she adds: “The top 10 stocks in the S&P 500, for example, are at their highest concentration in more than three decades. And the so-called Magnificent 7 tech names this encompasses are, in our view, the incumbents at the highest risk of disruption over the coming years.”
Read the full article here.
