3 AI ETFs to Buy Before They Soar to New Heights in 2023
$NVIDIA Corp(NVDA)$ once soared 29% in extended trading on Wednesday , directly breaking through its all-time high. As it's revenue, earnings per share, gross profit margin, and many other indicator for like data center business, game business, have soared by more than double digits QoQ.
In addition to the strong revenue performance, net profit rose significantly,operating costs fell, the company's guidance was even more astonishing. $NVIDIA Corp(NVDA)$ expects revenue for the next quarter to be around $11 billion, much higher than the expected $7.15 billion, which is directly higher by 54%.
Nvidia’s surge tells us that the frenzy of AI is still going on. Company CEO Jensen Huang said that the entire computer industry is undergoing two profound changes at the same time, accelerated computing and generative AI.
From a rational point of view, the speed of the rise of AI is unprecedented, I believe that this transformative technological opportunity of AI cannot be the only one.
Although I didn't get the AI bonus this time, I still choose not to chase the high as much as possible. But wait patiently for new opportunities.
In this article, I just did some observation on 3 target AI ETFs. below are the top 10 ETFs in Asset from to https://etfdb.com/:
$iShares U.S. Technology ETF(IYW)$ $Fidelity MSCI Information Technology Index ETF(FTEC)$ $First Trust Dow Jones Internet Index Fund(FDN)$ $iShares Global Tech ETF(IXN)$ $iShares Exponential Technologies ETF(XT)$ $iShares Expanded Tech Sector ETF(IGM)$ $Global X Robotics & Artificial Intelligence Thematic ETF(BOTZ)$ $SPDR S&P Kensho New Economies Composite ETF(KOMP)$ $Robo Global Robotics & Automation ETF(ROBO)$ $ARK Autonomous Technology & Robotics ETF(ARKQ)$
Bloomberg pointed out that the 14 U.S.-listed stock ETFs tracked with "AI" in their descriptions have received net inflows every month this year, totaling $338 million. Among them, nearly half flowed into the $Global X Robotics & Artificial Intelligence Thematic ETF(BOTZ)$ , which has a scale of US$1.9 billion and is currently the largest ETF dedicated to artificial intelligence.
The following 3 are just the ones I'm most interested in:
As more technology companies join the AI race, AI-themed exchange-traded funds (ETFs) are also popping up. On May 18, the investment institution Roundhill Investments launched "the world's first ETF focused on generative AI" $ROUNDHILL GENERATIVE AI & TECHNOLOGY ETF(CHAT)$ on the New York Stock Exchange, which is the first company dedicated to investing in generative AI-related stocks ETFs.
1. $ROUNDHILL GENERATIVE AI & TECHNOLOGY ETF(CHAT)$
Specifically, $ROUNDHILL GENERATIVE AI & TECHNOLOGY ETF(CHAT)$ invests in several different areas related to generative AI, including software, cloud infrastructure, network infrastructure, and services. Currently, the ETF already holds 32 companies, of which the top ten companies account for 56.9% of the holdings. $NVIDIA Corp(NVDA)$ ranked first, followed by $Microsoft(MSFT)$ , and Google's parent company $Alphabet(GOOG)$ and $Advanced Micro Devices(AMD)$ ranked third and fourth.
Analysts at Goldman Sachs estimate that AI could drive $7 trillion in economic growth over the next seven years by boosting productivity. Roundhill estimates the addressable market for generative AI enterprise software at $120 billion.
The birth of an ETF themed around AI and generative AI shows that artificial intelligence technology is moving from a niche technology to the mainstream. As of press time, CHAT YTD is -0.47%
2.$ROBO Global Artificial Intelligence ETF(THNQ)$
$ROBO Global Artificial Intelligence ETF(THNQ)$ invests in companies that are leading the AI revolution. Included in THNQ are companies developing the technology and infrastructure enabling AI, as well as companies that apply AI in various verticals, from business processes to e-commerce and healthcare.
With an expense ratio of 0.75%, the THNQ ETF offers exposure to $NVIDIA Corp(NVDA)$ , $Twilio(TWLO)$ , $Atlassian Corporation PLC(TEAM)$ , $Splunk(SPLK)$ , $Cloudflare, Inc.(NET)$ , $Amazon.com(AMZN)$ , $Microsoft(MSFT)$ and 62 other AI-related holdings.
Since the start of the year, the THNQ ETF exploded seeing a YTD increase of 23%.
3. $AI Powered Equity ETF(AIEQ)$
$AI Powered Equity ETF(AIEQ)$ 's portfolio roughly contains 150 stocks and is mainly inclined towards software and internet shares, with PLTR as its top holding. While Alphabet is among the ETF's top 10 holdings, it doesn't own popular AI stocks such as Nvidia and Microsoft.
Notably, investors have loaded up on tech stocks like NVIDIA Corporation, while the relatively lower returns of the AI-powered ETF appear to be ironical.
Interestingly, at a certain point in January, the AIEQ was reflecting year-to-date gains of over 16%, outperforming the S&P 500, the report said. However, the outperformance failed to continue. The AI Powered Equity ETF has gained 2.4% in 2023 so far.
Any other ETFs you are interested in?
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With this article I’m not comparing TWLO to Amazon but only bring Amazon up to make a point. Amazon lost $2.722B on $513.98B of revenue in 2022 and look at their market cap. With that being said, being profitable is important but not everything. You need to look at the potential the company has.
I'm The Investing Iguana, and I'm here to talk about the recent surge in Nvidia's stock price.
As you mentioned, Nvidia's revenue, earnings per share, gross profit margin, and many other indicators soared by more than double digits QoQ. In addition to the strong revenue performance, net profit rose significantly, operating costs fell, and the company's guidance was even more astonishing. Nvidia expects revenue for the next quarter to be around $11 billion, much higher than the expected $7.15 billion, which is directly higher by 54%.
This surge tells us that the frenzy of AI is still going on. Company CEO Jensen Huang said that the entire computer industry is undergoing two profound changes at the same time, accelerated computing and generative AI.
From a rational point of view, the speed of the rise of AI is unprecedented, and I believe that this transformative technological opportunity of AI cannot be the only one.
However, I would caution against chasing the high. Nvidia's stock price has already risen significantly, and it is possible that it could pull back in the near future. If you are interested in investing in AI, I would recommend doing your research and finding companies that are well-positioned to benefit from the growth of AI.
Here are a few AI ETFs that you may want to consider:
Global X Robotics & Artificial Intelligence ETF (BOTZ)
ROBO Global Robotics and Automation Index ETF (ROBO)
iShares Robotics and Artificial Intelligence Multisector ETF (IRBO)
These ETFs track a basket of companies that are involved in the development and use of AI. They offer a diversified way to invest in the AI sector.
Please note that I am not a financial advisor, and this is not financial advice. Do your own research before making any investment decisions.
Thanks for reading,
The Investing Iguana
Shorts were so sure it would fall. In the most wildest dream they didnt think it would go as much as 5% plus instead its 30% plus. They have heart attack now loool
I am planning to start selling at extremely high positions!! Watch your steps for next 2-3 quarters.
How does $NVDA$'s revenue forecast compare to other tech companies in the industry?
Anyone know how the Intel longs are doing??