Welcome to the October 2026 market update webinar. I'm Dan White, one of the portfolio managers at ARK, and I'll be hosting today's call. This call was pre-recorded on October 8, 2026. And now, I'll hand it over to the CEO and Chief Investment Officer of ARK, Cathie Wood. Cathie?
All right, Dan. Thank you very much, and thank you all for joining us. Here's a brief overview of the market backdrop. The market has become more volatile to the downside after a period of upside volatility. And in fact, we see this as healthy. It's a healthy correction. And I think if you go back to the "In the Know" webinar I hosted last week, you'll find more details, but I just wrote a note summarizing our view on what's going on, particularly with respect to interest rates and inflation. We believe that Federal Reserve Chair "Warsh" has directed everyone's attention toward personal consumption expenditures (PCE) inflation. The rate has fallen from 3.7% on an annual basis to 3.4% after a downward revision. But it's still far from the 2% level. So, we believe that "Warsh" is serious about his work. He wants to bring the inflation rate down to 2% or lower, as I suspect. And we believe he will reach that target. He will get there with significant help from the productivity gains that we believe are beginning to take off. Productivity gains are a powerful force against inflation, and we believe he will also benefit from oil prices. As the conflict in Iran cools down or escalates, whatever happens, this actually accelerates a trend that was underway during the COVID pandemic and supply chain issues when oil prices rose to $100 or more. There's a renewed shift toward electric vehicles. And if you look at global oil consumption, you'll find that 57% of it is allocated to transportation. If the transportation sector shifts to relying on the electric grid, oil prices will fall. Nearly 60% of that consumption will shift over time. And I think the recent rise in prices has accelerated this trend. Tesla's vehicle sales were much better than expected, as were sales of other electric vehicle manufacturers. So, we believe inflation will fall. We believe it could reach a negative rate. And yes, take the source into account. I've said it before. The technological revolution we're living through now is a revolution with a strong deflationary character. And with artificial intelligence entering cost structures and new revenue sources, we believe the inflation rate will fall significantly. If you look at inflation derived from Treasury Inflation-Protected Securities (TIPS) and separate it from the nominal Treasury yield, you'll find that Treasury yields are rising because of real yields, not because of inflation. And so, inflation expectations have remained relatively stable at around 2.4% over the next ten years if we use the 10-year Treasury yield. But real yields have risen significantly. And we believe this is consistent with an economy that is structurally trending upward. And this is primarily due to technology. So, we go into detail on that in the speech. And we're putting forward a number that actually increases every time we do more research. The number we used for real GDP growth over the next five years is 7 to 8%. But as we broaden that outlook, it actually rises further. I know that no one expects that at this moment. But I believe that as we go through earnings season, you'll see many companies surprise us with their growth rates. We're seeing this with the hyperscale cloud providers. They've already achieved significant growth rates, and they're on track to accelerate. And we see a lot of evidence that the cloud growth rate is accelerating for Amazon to return to the 40s. It reached low levels in the tens, then accelerated again to reach the 40s. We believe we'll see more examples of higher growth rates. The other side of this, of course, is that if we are in the midst of a technological revolution, it will change the way we work, live, and entertain ourselves. And this means it will disrupt the traditional global system. So, there will be a lot of disintermediation, a lot of disruption, if not destruction. So, stay tuned to the "In the Know" program for more details, and to get a summary of the speech I just published. With that, Dan, back to you.
All right. Thank you, Cathie. We'll now begin the Q&A session of today's webinar. We received questions from our clients, distribution partners, and via our fund accounts on X and Instagram under the handle arc_funds. The first question, Cathie, goes back to you regarding fund performance. This first question says: "Given the strong performance of the ARK fund family since the beginning of the year, some comments have circulated about long-term results across different time periods. Can you speak to that and share your view on long-term performance?"
Yes, I received this question recently at the Robin Hood Summit. And we filmed a clip, or the clip that represents my answer, which you can find on the X platform. And it generated, Dan, a lot of comments. And what I said is that your question raised the issue from the perspective of different time periods. There is only one time period that those who criticize our performance focus on. And that is the five-year period. If you look at these numbers, which now go through September of this year. If you look at the performance since the beginning of the year, and over three years, and ten years, and since inception, then ARKK, our flagship strategy, ranks in the top 5% approximately. So, it fluctuates slightly around that percentage. From our category as classified by Morningstar. That five-year period came after our 360% rise from the COVID lows to February 2021. Think about that. 360% was a lot, even we were saying at the time, this is not realistic. Hold on to your seats. So, compared to that move, yes. Our five-year returns look terrible. But in the context of ARK's history, we are very proud of our performance. So, if you're interested, you can listen to my more detailed answer, or perhaps more passionate one, on the X platform.
Thank you, Cathie. I think the sensitivity to the endpoint is the key message and how important it is. Clients don't actually use the funds that way, do they? They buy and sell during those fluctuations as well. So, I think a time point like that is not the best example. It's about the long-term performance of the manager. That's the real key. So, we'll move on to the next question here. Nick, there's some exciting news. ARK funds, specifically the exchange-traded funds, added Kalshi to the ARKK, ARKW, and ARKF funds. To join OpenAI as direct private investments within ARK's publicly traded funds available to everyone. So, the question directed to you is: What makes Kalshi unique? How far can this world of prediction markets grow? And how does ARK view holding private companies within the framework of publicly traded investment funds?
Yes, that's a great question, and I think you pointed to it in your question, which is that this is the second private name to be introduced into the public funds, after OpenAI, and I believe there's a reason for that, which goes back to the idea of prediction markets. If you look at prediction markets, they are likely the second fastest-growing category or sector outside of artificial intelligence. So, you could say that AI is the fastest-growing field right now. Okay, if you look at the prediction market numbers, they are very close to that level. I was just looking at the September numbers as they started coming in. The nominal trading volume of prediction markets grew 16-fold in September. It grew from $4.7 billion in September of 2025. And it reached approximately $78 billion in volume for the full month of September. So, this is the real reason behind our desire to bring in one of the leading assets in the prediction markets space, which is Kalshi. And now, why Kalshi? Well, Kalshi, during the same time period, and with competition in this space intensifying significantly, actually managed to increase its market share from 60% in September of last year to now 70%. Polymarket entered, and Novig, and a number of other competitors, in addition to all the sports betting platforms that launched their own prediction markets, and yet Kalshi was able to increase its market share. Not only that, but we also look at the pace of execution at these fintech companies. This is what we've done with companies like Block and Robinhood and Coinbase. This is how we measure the pace of innovation. What is the volume they can execute in a given year? Kalshi not only maintained its market share in its core prediction market offerings, but also launched perpetual futures contracts. They moved into different categories and achieved success. So, we are very excited to bring Kalshi and this amazing story to the public markets, and I'm excited for everyone to learn about it and know more about it.
Yes, Nick, I'll just add one thing. Kalshi launched an offering, and perhaps this offering was at a time when Robinhood was primarily transitioning to an internally developed prediction markets solution, or perhaps with another partner. And Kalshi was not affected by that at all. And at some point, I don't know what Robinhood's share of Kalshi's trading volume was.
Yes, that's a great point, Cathie, because Robinhood is a leading broker, or was a leading broker, for Kalshi's platform. So, they were driving demand through their retail-focused platform for Kalshi's prediction markets and the core markets associated with it. When Robinhood and Kalshi first launched their partnership, and because of the sheer volume of Robinhood with $28 billion in funded accounts, that grew to represent about 70% of Kalshi's total trading volume. So, there was concern even at ARK about the future of this relationship in the long term, especially since Robinhood ended up entering into a joint venture with SIG to launch Ruthaira, which is now their core prediction market. And since then, Robinhood's trading volume on Kalshi's platform has dropped from 70% to levels approaching 20%. But as you'll notice from the other statistic I just mentioned, they are still growing significantly in their leading market share on a nominal value basis. They have managed to move past the reliance on Robinhood and bring more direct users to Kalshi's platform, which is another great indicator of their execution efficiency. You'll notice that their app is usually among the most downloaded apps in the App Store. So, they are achieving exceptional results.
Great, thank you, Nick. And I'd like to add that adding Kalshi to these publicly traded investment funds is exciting. We also have Kalshi in the ARK Venture Fund. So, clients looking to invest in this space that combines the public and private sectors and this field of innovation have different ways to do so. For the next question, we'll move to Frank. A market update can't be complete without discussing the topic of artificial intelligence. So, Frank, there are rumors about Anthropic's IPO this year at a valuation that could exceed the benchmark set by SpaceX just a few months ago. Hmm, what justifies this valuation and how does it compare to OpenAI's valuation that has been rumored recently?
Absolutely. Yes, it appears that Anthropic is preparing for an initial public offering. Reports indicate that they could become a public company before Thanksgiving, but things are of course subject to change. They are reportedly targeting a valuation of $2 trillion, which would be larger than SpaceX's IPO valuation of just over $1.7 trillion. And the question is, how can this be explained? I believe there are two different ways to approach this matter. Let me start with the way ARK prefers to approach the market, which is the long-term view and the sheer size of the opportunity for this type of company. And as we publish in our "Big Ideas" reports, we believe that the revenue generated by AI companies could reach $7 trillion by 2030. It's penetrating a total market that we believe is much larger than traditional software. It's the global knowledge work total market, which we estimate at over $30 trillion in annual wages for knowledge workers. We don't believe these companies will cause knowledge workers to lose their jobs. We believe they will give them superpowers by using the agents that companies like Anthropic and OpenAI deploy within companies, and increasingly in the hands of consumers around the world. And as you know, of the $7 trillion, the two largest companies today are Anthropic and OpenAI in terms of revenue, and we believe these leading companies will continue to capture a very large share of that market through 2030 and beyond. I'd like to say specifically because they own the agent application "Claude" in Anthropic's case, which is used by end users, and they build the models that go into that product. They are in a unique position to combine the model and the agent together to deliver a differentiated experience, and they also have a cost advantage in doing so, which we believe is positive for the long-term sustainable economics of these leading AI companies. This is the top-down view. The more bottom-up way of thinking about the valuation is that Reuters reported that Anthropic reached $65 billion in annual run-rate revenue in August. And this is up from $9 billion at the beginning of the year. So, they are roughly on track to 10x their revenue again on an annual basis as they did over the past two years. And if you take that $65 billion as an annual run-rate revenue and assume they won't grow at all and this is the revenue they'll generate over the next 12 months, that equates to 30 times sales for a $2 trillion valuation. And Palantir and CrowdStrike and Cloudflare are all trading higher than that in the public markets today. And this is with high double-digit sales for those companies, or I should say high double-digit revenue growth for Palantir and CrowdStrike and Cloudflare accelerating but with revenue growth of less than 50%. We're talking about Anthropic's growth in high triple digits. So, the sheer scale and scope of growth here is truly unbelievable and unlike anything we've seen before. So, I believe this really helps put in context why a $2 trillion valuation is reasonable. And I know the question mentioned OpenAI, which reports indicate is looking to raise a $1.4 trillion funding round. And the latest rumors suggest it could be approaching $70 billion in annual run-rate revenue. That would be 20 times sales. So, perhaps if you look at it compared to public companies and Anthropic, it might look like a bargain. But there are many opinions on this matter, and we're happy to have exposure to both of these companies in the ARK Venture Fund, as you mentioned, Dan.
Great. Thank you, Frank. This helps put things in perspective here. Cathie, I'll come back to you to talk about performance again. Okay, the first question was about the ARK fund family, let's focus on a specific fund, ARKG. It was the best-performing exchange-traded fund in our group this year. It declined last week. So, the question here is, how should investors read this week's move compared to the year-to-date return? And then, what do you think are some of the key catalysts here for the field of multiomics?
Okay, I'll start and then I'll hand it over to Ovid. Okay, as you know, we've been saying since the beginning of the company, and particularly over the past four to five years, that this multiomics revolution is the deepest application of artificial intelligence. And that means reducing the cost and time of research and discovering and developing new drugs. Developing diagnostic tests capable of diagnosing diseases through blood tests, especially cancer, in the early stage or perhaps even before the early stage. And then the holy grail, which is curing diseases. Anthropic has become very prominent and clearer in this regard. Anthropic has started moving toward discovering and developing new drugs. And it's forming partnerships with companies like Twist and 10x. Now, many people haven't even heard of these names. These names have been in our portfolio almost since our founding in 2014 because they represent the foundational tools for this revolution in healthcare. And we have many other similar names in the portfolio. This won't stop. We've just started exploring life sciences. The more we learn, the more we realize how little we know, and how much more needs to be done to transform healthcare from what it is now, which is "sick care". It likely consumes 80% of the budget, which is close to 20% of our GDP. So, that's "sick care". We believe that this revolution, largely powered by artificial intelligence, will move many of these sick care dollars to true healthcare. So, I'll hand it over to Ovid to finish.
