This year saw several IPO debuts with Arm (ARM), Instacart (CART), Cava (CAVA), and Birkenstock (BIRK) all hitting the public market. As 2023 wraps up, Ark Invest CEO Cathie Wood joins Yahoo Finance to discuss what the company is looking to invest in next year for its Ark Innovation ETF (ARKK).

"We're diversifying once again. We're adding back... some stocks that we sold," Wood says. "We're looking forward to the IPO window opening again," Wood notes, "especially in the AI space, but in other innovation spaces as well."

"We're looking for IPOs and we'll be eager investors." Some of the companies Wood is hoping will go public are SpaceX, Anthropic, Databricks, and Discord. "I hope they do go public because that's the best way to scale and to reward talent... with a public stock," Wood adds.

Click here to watch the full interview with Ark Invest’s Cathie Wood or check out what she says about buying Tesla (TSLA) stock here.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Video Transcript

JULIE HYMAN: I just wanted to come back around, circle back around to your benchmark fund, ARRK. And correct me if I'm wrong, but it seems here that your big bets have been pretty consistent over the past few years. You've moved them around in terms of weighting. But they've been pretty consistent. And I'm curious here going into 2024, are there entirely new areas that you might be looking? Are there new stock ideas that you're hitting upon as we go into 2024 and beyond for that matter?

CATHIE WOOD: Yes. Well, during the two years, the innovation was in a true bear market. When the fear of interest rates and then the actuality or the reality of interest rates moving up just crucified innovation stocks, we concentrated our portfolio towards our highest conviction names. This year, now that we've paid our dues, interest rates are up, we think we're through the worst of it, now what you're seeing is we're diversifying once again. We're adding back stock, some stocks that we sold. And we are looking forward to, especially in the AI space, but in other innovation spaces as well, we're looking forward to the IPO window opening again.

What we're seeing in the private markets right now, especially since we have a venture fund as well, is there are still downrounds taking place. It is astonishing to us that the private markets lag the public markets by so much, so much time, almost a year's time. And so we're looking for IPOs, and we'll be eager investors. So you'll see us further diversifying as the IPO window opens up. And we think that will happen as interest rates look like they certainly have peaked and look like they're going to start down.