Cathie Wood, a prominent U.S. tech investor, is urging Donald Trump’s incoming administration to boost economic growth by backdating corporate and personal tax cuts to January 1, 2025, according to Reuters. Wood’s ARK Innovation ETF (ARKK), which has surged 17% since Trump’s victory, stands to benefit from his promised policy changes, such as deregulation and a focus on crypto and artificial intelligence. Key fund holdings like Tesla (TSLA) and Coinbase (COIN) have already gained significantly since November.
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Wood supports Trump’s economic platform because she believes that it will drive innovation and reduce costs for corporate America. Wood also thinks that the U.S. crypto industry will recover under Trump’s administration since he wants the U.S. to lead the world in innovation. However, she mostly emphasized the importance of clarity on tax reforms and noted that retroactive cuts could provide much-needed market certainty.
Not in Favor of Tariffs
Interestingly, Wood is not thrilled about the potential for tariffs since she generally opposes them. Nevertheless, she views Trump’s tariff threats as negotiation tactics. It is also worth noting that although Wood did not financially back Trump’s campaign, she does remain in touch with Elon Musk and pro-crypto Senator Cynthia Lummis, who are both helping shape Trump’s policies.
Is ARKK a buy or sell?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on ARKK stock based on 29 Buys, five Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 12% rally in its share price over the past year, the average ARKK price target of $66.82 per share implies 12.5% upside potential.
