WHEN: Today, Thursday, October 12, 2023
WHERE: CNBC’s “Financial Advisor Summit – Making the Most of Economic Uncertainty”
Following are excerpts from the unofficial transcripts of CNBC interviews, Starboard Value CEO & CIO Jeff Smith with CNBC’s Sara Eisen and ARK Invest CEO Cathie Wood with CNBC’s Deirdre Bosa, live during CNBC’s Financial Advisor Summit today, Thursday, October 12.
All references must be sourced to CNBC’s Financial Advisor Summit.
WOOD ON AI DEFLATION
CATHIE WOOD: Some of the most powerful deflationary trends we’re seeing are because of AI, Artificial Intelligence. So AI training costs are dropping 70% per year. And we think that AI is going to lead to one of the biggest improvements in productivity of AI investment lifetime, which is highly anti-inflationary.
WOOD ON AI CONVERGING
WOOD: So we’ve based our research on robotics, energy storage, artificial intelligence, blockchain technology, and multi omics sequencing. We’re seeing convergences among those innovation platforms. So we’re seeing exponential growth… but when you have these platforms feeding each other, you’ll get super exponential growth and probably growth surprises that will swamp whatever we see going on with interest rates.
SMITH ON STARBOARD STRATEGY
JEFF SMITH: The best way to think about it is, we’re looking for companies that are undervalued and where there’s something we can do about it. So is a company undervalued? Do we have an opportunity to make changes to those companies that will make a difference? And do we have a clear path to be able to influence those companies in the event that management for some reason isn’t willing to listen to us in the first place?
SMITH ON UNDERPERFORMERS
SMITH: So our job is to look at those companies in every industry that are underperforming and try and figure out, should they be underperforming? I mean, that’s the simplest way to think about it: If we can find companies that are underperforming– so they have lower margins, lower growth rate and ideally also a lower multiple, but we think their assets are really good; we think they actually should be well positioned. there’s no structural reason why they should be underperforming. Then, that’s a great opportunity for us to get involved.