An exchange-traded fund focused on artificial intelligence saw a significant rise during early trading hours.
The E Fund Artificial Intelligence ETF (SEHK: 03489) advanced nearly 3% in the morning session. At the time of writing, it is up 1.32%, trading at HK$13.86.
This movement follows recent market concerns regarding a potential oversupply of AI computing capacity, which were initially sparked by Meta's announcement to sell access to its AI computing power and models to external clients.
However, analysts from Jefferies have countered this narrative, emphasizing that demand for computing power continues to outstrip available supply. The recent market anxiety over a computing glut is seen as having been largely digested, with the fundamental growth drivers for the sector remaining intact. The upcoming July earnings season is anticipated to provide further validation for this positive outlook.
Adding to the sector's momentum, Alibaba's preliminary first-quarter results indicate its cloud revenue is projected to grow approximately 45% year-over-year, with operating margins improving to 11%-12%. This suggests a mature, closed-loop model for downstream monetization is now in place.
Public information shows that the E Fund AI ETF closely tracks the FTSE Global Artificial Intelligence Index. It provides exposure across Hong Kong and U.S. markets, covering leading companies in both computing hardware and AI applications. This positioning makes it suitable for investors looking to capitalize on the continued expansion of the computing power theme and the recovery cycle for cloud service providers.
It is also noteworthy that this ETF, along with seven others, was recently added to the list of eligible southbound ETFs under the Stock Connect program, with the inclusion taking effect from May 6th.
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