The AI Hot Will Continue to Boom, AI Stocks & ETFs to Buy

The AI boom in the U.S. stock market technology sector has boosted the $NASDAQ(.IXIC)$ and $S&P 500(.SPX)$ this year.

To put things into perspective: 10 stocks have contributed 90% of $S&P 500(.SPX)$ 's 13.0% gain this year, the most concentrated market ever, Bernstein says.

The stocks are $Apple(AAPL)$ (up 41.45%), $Microsoft(MSFT)$ (+38.37%), $NVIDIA Corp(NVDA)$ (+170.17%), $Alphabet(GOOG)$ (+40.14%), $Amazon.com(AMZN)$ (+50.68%), $Meta Platforms, Inc.(META)$ (+125.24%), $Tesla Motors(TSLA)$ (+102.8%), $Broadcom(AVGO)$ (+52.98%), $Advanced Micro Devices(AMD)$ (+99.46%) & $Salesforce.com(CRM)$ (+61.17%).

Data as of June 13th

Among the above-mentioned large technology stocks, 4 stocks with a market value of more than $1 trillion. They are $Apple(AAPL)$ , $Microsoft(MSFT)$ , $Alphabet(GOOG)$ and $Amazon.com(AMZN)$ , and $NVIDIA Corp(NVDA)$ approaching this level.

1. The AI boom will continue in the future

Brian Belski, chief investment strategist at BMO Capital Markets, believes the AI boom is real and could drive future growth for many stocks in the space. The sector has performed very strongly so far this year, but we believe that momentum, even if it has slowed, will likely continue for the foreseeable future. "

Adding to analyst Michael Goldstein, AI stocks are still undervalued compared to what they have been in past waves of innovation. Therefore, the AI boom is not the same thing as the dot-com bubble, nor will it suffer the same misfortune.

2. Not all the Big Tech Stocks All Overvalued

The dynamic price-earnings ratio of $Microsoft(MSFT)$ is 34.7, compared with the industry average of 30.2. $Apple(AAPL)$ stock trades at a price-to-earnings ratio of 30.2, compared with the industry average of 26.7.

The following two stocks are fairly valued. $Alphabet(GOOG)$ trades at a price-to-earnings ratio of 23.1, compared with the industry average of 30.2. $Meta Platforms, Inc.(META)$ trades at a P/E ratio of 22.6, compared to the industry average of 30.2.

Among the top seven major technology stocks, The dynamic price-earnings ratio of $NVIDIA Corp(NVDA)$ is 52.7, higher than the industry average of 36.1. $Tesla Motors(TSLA)$ trades at a price-to-earnings ratio of 60.1, higher than the industry average of 19.6. and the dynamic price-earnings ratio of $Amazon.com(AMZN)$ is 79.4, higher than the industry average of 25.9.

However, $NVIDIA Corp(NVDA)$ does not represent the whole of AI. There are many other AI stocks that are still undervalued or even undervalued, and are still good buying points.

In addition, if you buy an AI ETF, you not only invest in these large technology companies, but also indirectly buy the stocks of many small-scale AI companies. For example, the following artificial intelligence ETFs.

3. AI ETFs Worth to Watch

• $AI Powered Equity ETF(AIEQ)$

• $ROUNDHILL GENERATIVE AI & TECHNOLOGY ETF(CHAT)$

• $Robo Global Robotics & Automation ETF(ROBO)$

• $Global X Robotics & Artificial Intelligence Thematic ETF(BOTZ)$

• $iShares Robotics and Artificial Intelligence ETF(IRBO)$

• $First Trust Nasdaq Artificial Intelligence and Robotics ETF(ROBT)$

  Data as of June 13th

Summary

The AI boom is reshaping industries and redefining opportunities. According to the forecast of Goldman Sachs, the entire artificial intelligence industry will drive global economic growth of US$7 trillion in the next seven years. After the large-scale popularization of AI, labor productivity will be accelerated, which in turn will drive economic growth.