Gold, Not Artificial Intelligence, Is in Bubble Territory, Argues Ark Invest’s Cathie Wood
Tech-focused investor Cathie Wood is pushing back against the popular narrative that artificial intelligence is the next great market bubble. In her view, the real excess is not in AI stocks, but in one of the oldest havens in finance: gold.
Her comments followed a dramatic spike in the price of the precious metal, which recently vaulted to a fresh all-time high above $5,600 per ounce in intraday trading. According to data from Ark Invest, that move also pushed gold’s value to a record share of the U.S. M2 money supply, a broad measure of cash and highly liquid deposits in the economy.
Wood highlighted that combination—vertical price action paired with historic valuation versus money supply—as a classic signal of speculative overheating. Posting to her followers on X, she warned that the rally is likely in its late stages rather than the beginning of a new, sustainable uptrend.
“The odds are high that the gold price is heading for a fall,” Wood wrote. She added that while “parabolic moves often take asset prices higher than most investors would think possible,” those dramatic, almost “out‑of‑this‑world” spikes usually appear near the end of a market cycle, not at the start of one. From Ark’s perspective, she concluded, “the bubble today is not in AI, but in gold.”
Her stance cuts directly against a building chorus of skeptics who see the rapid rise in AI-related equities—particularly the largest chipmakers and cloud companies—as unsustainable. Instead of calling the AI boom a mania, Wood frames it as the early phase of a long technology adoption curve, comparable to previous shifts such as the internet, smartphones, or cloud computing. In that framework, high valuations can be justified if the underlying technology is set to reshape productivity, profits, and entire industries over time.
Gold, by contrast, does not generate cash flows or productivity gains. Its value relies largely on investor perception, scarcity, and its role as a store of value and hedge against monetary and geopolitical risk. That makes it especially vulnerable, Wood suggests, when enthusiasm becomes detached from fundamentals like real interest rates, inflation expectations, and currency dynamics. When the price of a non‑productive asset accelerates too quickly relative to the money supply and broader economic conditions, it can be a sign that fear and speculation—not rational hedging—are driving demand.
By pointing to gold’s record share of M2, Ark Invest is effectively arguing that the metal has absorbed an unusually large slice of liquidity in the system. Typically, investors turn to gold as a safe harbor during periods of uncertainty or when they fear that fiat currencies will be debased by aggressive monetary policy. But when gold’s price climbs far faster than the pace of money creation, it raises the question of whether the rush into the asset has gone too far, too fast.
Wood’s outlook also reflects her broader investment philosophy. Ark has long been positioned around what it calls “disruptive innovation”—themes such as AI, robotics, genomics, and next‑generation internet applications. From that vantage point, capital flowing into gold may appear backward‑looking: investors piling into an asset rooted in preservation and defense rather than growth and transformation. The juxtaposition is stark: one side represents optimism about future technology and productivity; the other, anxiety about instability and loss of purchasing power.
The notion of parabolic price action is crucial to her argument. In market history, steep, accelerating price curves often precede sharp reversals. Whether it was housing in the mid‑2000s, tech stocks in 2000, or various commodities in prior decades, the pattern of late‑cycle euphoria tends to look similar: rising prices attract more buyers, which push prices even higher, creating a feedback loop that eventually breaks when marginal demand dries up. Wood is effectively suggesting that gold now exhibits many of those late‑cycle hallmarks.
That does not mean she dismisses all traditional hedges outright. Even within Ark’s worldview, assets like gold can serve a purpose in risk management or portfolio diversification. But labeling it “the bubble” implies that, in her assessment, investors are overpaying for that insurance. If inflation pressures cool, central banks maintain tighter policy than expected, or geopolitical fears ebb, the reasons for holding gold at such elevated levels could weaken quickly, leading to a painful repricing.
Her defense of AI is equally pointed. Critics warn that valuations of leading AI companies reflect unrealistic expectations about future profit margins and market dominance. Wood counters that the underlying infrastructure—chips, data centers, software platforms—is still in the early innings of deployment. As AI tools spread into sectors like healthcare, finance, manufacturing, and media, she believes the earnings power of the ecosystem could expand significantly, supporting today’s prices and possibly more. In that sense, what looks like froth to skeptics appears to Ark as a rational market response to a genuine technological revolution.
For investors, Wood’s framing sets up a clear strategic choice: align with defensive, scarcity‑based assets like gold, or with growth‑oriented innovation such as AI. In practice, portfolios may include elements of both, but her message is that the real mispricing lies on the side many assume is safe. A crowded rush into a perceived safe haven can, in her view, be more dangerous than owning volatile growth assets whose long‑term potential remains underappreciated.
Her comments also underscore how narratives can shift at market extremes. When a technology or asset class rallies hard, stories of “bubbles” proliferate, often focusing on what is most visible: soaring AI chip makers, headline‑grabbing tech giants, or new software darlings. Wood invites investors to look one layer deeper, examining where price action has become most detached from underlying value and where psychological comfort may be masquerading as prudence.
Ultimately, whether gold or AI proves to be more overvalued will be decided over the coming years by earnings, adoption, policy shifts, and investor psychology. Wood is staking her reputation on a contrarian view: that AI is in an early, productive boom, while gold is in a late‑stage, fragile one. For now, her warning about parabolic moves and “out‑of‑this‑world spikes” serves as a reminder that even the safest‑seeming assets can be caught in speculative excess—and that bubbles are often found where investors least expect them.