2024 Year-End Insights: Narrow Peaks and Broad Horizons

In 2024, markets told a story of contrasts: the narrow peaks of mega-cap dominance in the first half gave way to a broader, more inclusive rally in the second. We didn’t just see shifting market dynamics — we saw technological breakthroughs, sustainability progress and the rise of truly active management to navigate complexity and seize opportunity.

The following 10 key insights reflect a year that challenged expectations, rewarded conviction and laid the groundwork for future growth.

1. The Year of AI Platforms: From Infrastructure to Applications

If 2023 laid the hardware foundations for AI, 2024 was the year AI platforms demonstrated their transformative power. Companies like Palantir, in the PaaS and Infrastructure Software category¹ of the AI stack, emerged as architects of real-world AI applications, providing platforms that drive decision-making in defense, enterprise operations and government.

Source: ARK Investment Management LLC, 2024, based on data from SWE-Bench and IDC with data as of August 7, 2024.

Tesla continued to push boundaries of AI with its Full Self-Driving (FSD) platform. The company unveiled a new and improved Optimus robot. At Tesla’s showcase event, Optimus demonstrated remarkable dexterity, including, recently, playing catch with a tennis ball — a milestone for humanoid robotics.

Meanwhile, Meta’s generative AI investments accelerated with multiple iterations of the LLaMA series — LLaMA 2, LLaMA 3, and the latest version announced by Mark Zuckerberg in December. Meta’s open-source models are democratising AI capabilities and redefining consumer technology and productivity tools.

For every dollar invested in AI hardware, up to 20 times flows into AI software.² The infrastructure race is giving way to a new era of AI-driven productivity and automation.

2. The Right Space: Engineering New Frontiers

Space exploration in 2024 was about execution, not ambition. SpaceX proved why it’s probably the most important company in the world. Its successful use of “chopsticks” to catch a returning Super Heavy booster marked a leap in rocket reusability, bringing us closer to low-cost, high-frequency space access. This achievement embodies the philosophy of iterative engineering unlocking exponential progress.

Image from Sky News.

Meanwhile, Rocket Lab delivered on the promise of small satellite launches, enabling responsive access to orbit for defence, communications and Earth observation. Its share price reached new heights. As robotics, AI and space technologies converge, we are witnessing the dawn of a new industrial revolution beyond our planet. And with a new administration likely to prioritise space exploration—and Elon Musk’s influence in those circles—the next four years could prove pivotal.

3. Multiomics: Gains Hiding in Plain Sight

While AI dominated headlines, multiomics technologies quietly advanced toward revolutionising healthcare. By integrating genomics, proteomics and metabolomics, multiomics promises breakthroughs in personalised, preventive, predictive and precise medicine. The fifth “P” — participatory — reflects the shift toward empowering patients to engage with their health data and treatment plans.

Leaders in Artificial Intelligence agree. Anthropic’s Dario Amodei noted we could witness a century’s worth of healthcare progress within the next decade.³ Those who recognise this silent revolution may find themselves at the forefront of healthcare’s next great leap.

Sources: ARK Investment Management LLC, 2024. This ARK analysis is based on a range of external sources, including Recursion 2024, , Paul et al. 2010, Schreiber 2022, and Dreiman 2021, which may be provided upon request. Forecasts are inherently limited and cannot be relied upon. For informational purposes only and should not be considered investment advice or a recommendation to buy, sell, or hold any particular security.

4. Sustainability Isn’t Dead: Pragmatism Over Politics

Despite political turbulence, 2024 made it clear that sustainable technologies are propelled by forces far beyond election cycles. This year, solar and battery costs continued to decline, hitting record lows. According to Ember, global solar generation surged by 26% year-over-year, while battery storage deployments increased by 60%.⁴

Solar’s levelised cost of electricity (LCOE) dropped to under $30 per MWh, making it the cheapest form of power in many regions.⁵ Battery prices fell to an average of $115 per kWh, driven by advances in manufacturing and materials technology.⁶ Meanwhile, nuclear energy experienced a renaissance, with new reactors coming online and fusion research making strides.

These tailwinds reflect a shift from ideology to pragmatism: sustainability is no longer about virtue signaling; it’s about efficiency, security and resilience. The transition to abundant, clean energy is not a political choice — it’s an economic inevitability.

5. Electrification Supercycle: $7 Trillion of Transformation

In 2024, the electrification supercycle accelerated. Driven by AI’s growing energy demands, global decarbonisation goals, and reindustrialisation efforts, this shift is reshaping entire industries. The IEA projects clean energy investment to reach $2 trillion in 2024, with total energy investment surpassing $3 trillion for the first time.⁷

This year, AI’s energy-intensive data centres became central to this narrative. Training models like GPT-3 consumes as much electricity as 120 U.S. homes annually.⁸ To meet these demands, companies like ABB and Schneider Electric are modernising grids to handle increased loads and integrate renewable energy sources.

Battery innovation is keeping pace. Advances in solid-state batteries and grid-scale storage solutions are enabling efficient energy storage. Leaders like Tesla and CATL are expanding capacity to support the rapid adoption of EVs and industrial electrification.

Investors who recognise the scale and inevitability of this transformation — from utilities to EV manufacturers and grid technology leaders — are positioning themselves for a decade of growth.

6. Generative AI: Unlocking Human Productivity 

Generative AI became a core driver of productivity in 2024. Tools like Microsoft Copilot and Google Gemini automated developer tasks, enabling I.T. engineers to achieve output comparable to experienced professionals, with coding success rates rising from 37% to 86%.⁹ Businesses saw rapid RoI¹⁰, with developer efficiency increasing by 26%, while AI-driven automation in logistics, customer service, and data analysis significantly boosted profitability.¹¹

The rise of domain-specific AI models accelerated breakthroughs in specialised fields. In climate science, models like Microsoft’s Aurora improved weather forecasting accuracy, benefiting industries reliant on precise climate data, such as agriculture and logistics. In pharmaceuticals, models like Chai-1 optimised drug discovery by predicting molecular structures and interactions, reducing research costs and timelines.

AI’s ability to augment non-specialists also drove productivity gains. Studies showed that non-expert employees using AI tools could perform at levels comparable to experienced professionals.

The impact on workforce efficiency was immediate, particularly in industries facing skilled labour shortages or requiring rapid upskilling. These productivity gains are now showing up in economic statistics.

7. U.S. Market Strength: Broadening Horizons

The U.S. equity market defied expectations in 2024. In the first half, the “Magnificent Seven”—a group of mega-cap technology stocks—dominated benchmark returns. By the second half, the rally broadened to include the other S&P 497 companies and second- and third-order AI beneficiaries across sectors such as software, defence, space, energy and healthcare.

Inflation fell from nearly 9.1% in June 2022 to 2.7% in November 2024, according to the U.S. Bureau of Labor Statistics.¹² The Atlanta Fed’s GDPNow model now forecasts fourth-quarter growth at 3.3% (09 December 2024).¹³

Household balance sheets remained robust, and corporate earnings were strong, and equities surged to all-time highs, with the S&P 500 achieving its 57^th record close of the year.¹⁴

Broad-based market strength reflected the resilience of the U.S. economy, supported by declining inflation, a robust consumer and a reasonably stable labour market.

8. Bitcoin at $100K: The System is Changing

Bitcoin’s rise past $100K offered a signal of deeper structural shifts in the global financial system​. With Paul Atkins poised to lead a reformed SEC and David Sacks as the new “AI & Crypto Csar”, regulatory headwinds have turned into tailwinds for crypto as we enter 2025.

Source: ARK Investment Management LLC, 2024. Chart data from Glassnode. Information as of November 30, 2024. STH realized price data may be subject to change over time since they are entity-adjusted in real time via a machine-learning algorithm. For more information on certain terms, please read our Glossary Of Terms in the Appendix of this report. For informational purposes only and should not be considered investment advice or a recommendation to buy, sell, or hold any particular security or cryptocurrency. Forecasts are inherently limited and cannot be relied upon. Past performance is not indicative of future results.

This milestone, however, might only be the beginning. Bitcoin still represents a mere 0.2% of global assets​. As institutional treasuries and Fortune 500 companies consider allocating, the spillover effect could be enormous.

The rising distrust in fiat currencies coupled state-sponsored fiscal irresponsibility are driving investors toward decentralised alternatives. Bitcoin’s role as a hedge against monetary mismanagement and political dysfunction is reasonable, practical and increasingly, necessary.

9. Trump 2.0: Implications for Technology, Innovation, and the Economy

The re-election of Donald Trump in 2024 brings sweeping implications across sectors. The administration’s pro-business stance could ease antitrust regulations, fostering mergers among tech giants. A push for AI self-governance aims to encourage innovation with minimal regulation.

In crypto, Trump’s pledge to make the U.S. the “crypto capital” has bolstered confidence, pushing Bitcoin past $100K. Proposed corporate tax cuts may stimulate growth, but risk expanding the deficit. Meanwhile, aggressive tariffs on Chinese tech imports could disrupt global supply chains.

In healthcare, deregulation may reshape access and costs.

Trump’s fiscal policies—marked by tax cuts and increased spending—could fuel inflation, leading the Fed to maintain higher interest rates. However, a renewed emphasis on government efficiency may push unemployment higher, prompting the Fed to anticipate economic slowdown and continue cutting rates to stimulate growth.

At its core, Trump 2.0 signals a bet on deregulation, pro-business policies, and strategic nationalism—shaping the trajectory of tech, trade, and innovation.

Source: The Macro Compass.

10. The Rise of Active ETFs: A Transformative Year

In 2024, Active ETFs experienced continued growth, marking a pivotal shift and trajectory.

In the U.S., active ETFs amassed approximately $190 billion in assets during the first nine months, nearly matching the total inflows of the previous year.¹⁵  This surge elevated active ETFs to account for 8.1% of U.S. ETF assets, capturing a record 27.9% of all ETF inflows.¹⁶

Europe mirrored this trend, with active ETF assets reaching $52 billion, representing 7.1% of the region’s ETF flows in 2024.¹⁷

This momentum reflects a broader investor preference for strategies that can navigate complex markets and capitalise on emerging opportunities, signaling a significant evolution in both U.S. and European investment approaches.

10 (Bonus). Quantum Computing: Breakthroughs Reshape What’s Possible

In 2024, quantum computing advanced toward real-world applications. Google’s Quantum AI lab achieved exponential error suppression with its “Bristlecone” processor, while IBM’s new “Willow” system demonstrated improved reliability and scalability.

Image 1 (Left) from TechCrunch, Google. Image 2 (Right) from Rigetti Computing.

These breakthroughs promise to transform fields like drug discovery, materials science, and cryptography. Quantum precision in simulating molecular interactions could dramatically shorten drug development timelines. Meanwhile, the potential to break current encryption standards has accelerated efforts to develop post-quantum cryptography.

Quantum computing is shifting from theory to practical, scalable solutions, poised to redefine innovation and problem-solving across industries.

Conclusion

In a year marked by shifting tides, 2024 demonstrated how innovation and adaptability can thrive amid changing market dynamics. From the transformative power of AI and electrification to the resurgence of sustainable technologies and active management, opportunities emerged for those ready to embrace progress. As we move into 2025, these forces continue to shape a world where conviction, resilience, and strategic thinking are the keys to unlocking future growth.