On Thursday, Cathie Wood of Ark Invest stated that the technology companies in her innovation-focused portfolio are significantly undervalued and that the current sell-off in her fund is only temporary.

On Thursday, CNBC's "Halftime Report," Wood stated, "We've seen a big decline." "We believe that innovation is available at a discount..." Our technology stocks are drastically undervalued compared to their potential. Over the next five years, we'll be managing a deep value portfolio."

Her flagship fund, the Ark Innovation ETF, was entangled in the center of the tech-fueled sell-off in 2022, losing 26% year to date. Some of her significant stakes, including Zoom, Teladoc Health, and Roku, have plunged as much as 70% this year because of expectations of increasing interest rates.

"Our major concern is that our investors convert temporary losses into long-term losses," Wood continued.

Higher interest rates tend to penalize growth segments of the market that rely on cheap interest rates to finance innovation. Their future revenues become less tempting as interest rates increase.

Wood indicated that she does not invest in well-known technology companies like Microsoft. ARKK invests in cutting-edge technology in various fields, including DNA, automation, robotics, and artificial intelligence. Her top holdings are Tesla, Exact Sciences, UiPath, and Coinbase.

"Today's investors are doing the polar opposite of what they were doing in the late 1990s. They're attempting to leave for their life. It's a risky investment due to inflation and interest rates. And the hills serve as yardsticks for them. Wood explained, "They're traveling back in time."

"If we are correct, those benchmarks are where the risk rests, and disruptive innovation is disintermediating and challenging the established world order," says the author. "Not our portfolios," she continued.

Despite the terrible performance, FactSet reports that her ARKK has received nearly $70 million in net inflows so far this year.

Inflationary pressures on growth stocks, according to the innovator, will eventually go away, and deflationary forces will take their place.

Wood continued, "A lot of what's going on has to do with supply networks." "Deflationary pressures are building in the economy, and I believe they are rather substantial."