Key Takeaways
- The investment landscape is evolving, and artificial intelligence (AI) is playing an increasingly important role.
- There are a variety of AI ETFs available, each with its own focus and investment strategy.
- What about AI-related stocks?
The landscape of investing is undergoing a remarkable transformation, driven by the emergence of new technology and the evolving needs of investors. While cryptocurrencies have captured much of the spotlight, particularly with the recent approval of spot Bitcoin ETFs by the US Securities and Exchange Commission (SEC), artificial intelligence (AI) is rapidly emerging as a transformative force in the financial world.
Investing in AI-focused exchange-traded funds (ETFs) offers a compelling opportunity to gain exposure to this rapidly growing sector and participate in its potential for substantial growth. AI is poised to revolutionize industries across the board, from healthcare and finance to manufacturing and transportation. By investing in AI ETFs, investors can position themselves for long-term growth and potentially reap significant rewards from this transformative technology.
Investing In AI
As artificial intelligence continues to play an increasingly significant role in our lives, the heightened interest from investors is unsurprising. However, it’s crucial to recognize that investing inherently involves risks, irrespective of the sector. Nevertheless, these risks can be mitigated through meticulous market analysis, consideration of macroeconomic factors, examination of companies and their business models, and assessment of turnover, liquidity, and debts.
It is imperative to emphasize that past performance does not guarantee future results, which can be both predictable and unexpected. In the realm of artificial intelligence, it’s essential to view this technology as an enabling force for diverse activities.
In the emerging ecosystem, some companies focus on developing AI technology, while others utilize it. There are also those that internally process AI for optimizing business processes, creating a distinction in risk factors based on the chosen investment. Currently, investing in companies developing AI infrastructure is perceived as less risky than those solely using it.
Investing in companies solely using AI may pose challenges if their market isn’t large enough for profitability. In contrast, established companies with a broad impact across sectors offer a more moderate risk compared to smaller, technology-focused firms. This is even though the latter may offer potentially higher returns.
Top 5 AI-Related ETFs
Below is a list of the 5 main ETFs available for those wishing to invest in AI:
iShares Robotics and Artificial Intelligence ETF (Ticker:IRBO)
It allows to invest in companies active in the field of robotics and AI, such as manufacturers of robots, artificial intelligence software, and automation technologies, and tracks the FactSet Global Robotics and Artificial Intelligence Index.
Global X Robotics & Artificial Intelligence ETF (Ticker: BOTZ)
It invests in robotics and AI companies, including manufacturers of robots, artificial intelligence software, and automation technologies. It tracks the Index Global Robotics & Artificial Intelligence Thematic Index.
First Trust Nasdaq Artificial Intelligence and Robotics ETF (Ticker: ROBT)
It seeks to replicate the Nasdaq CTA Artificial Intelligence and Robotics Index, which tracks the performance of companies involved in the development of AI and robotics technologies.
AI Powered Equity ETF (Ticker: AIEQ)
It employs a sophisticated AI algorithm to intelligently identify and execute trades on promising U.S. stocks. This ETF alignes its portfolio with the AI Powered Equity Index for long-term, consistent growth.
WisdomTree Artificial Intelligence ETF (Ticker: AIQ)
By tracking the Nasdaq CTA Artificial Intelligence Index, WTAI offers exposure to companies that are actively utilizing AI to drive innovation and growth. This index meticulously selects companies based on their perceived AI intensity. It ensures that investors are directly aligned with the forefront of AI adoption.
Here’s a CCN guide to how to build an ETF portfolio.
What About Stocks?
As artificial intelligence (AI) continues to permeate various sectors, a growing number of publicly traded companies are recognizing its transformative potential and investing heavily in its development. These companies have a strong position to benefit from AI’s expansion into new markets and applications.
Among the leading 20 publicly traded companies actively involved in AI development are some of the most recognizable names in the tech industry: Alphabet (Google), Amazon, Microsoft, Apple, Facebook, Nvidia, Intel, IBM, Baidu, and Alibaba Group Holding.
Furthermore, Tencent Holdings, Samsung Electronics, SAP, Salesforce.com, Oracle Corporation, and Accenture are also investing in AI. Cisco Systems, Siemens, LG Electronics, and Philips are other notable names in this sector.
AI is a key focus for these companies. Yes, but it’s important to acknowledge that many of them also have substantial operations in other technology sectors. This diversified approach allows them to leverage their expertise and resources across multiple industries. This also further enhances their chances of success in the AI revolution.
As AI continues to evolve, these companies will play a pivotal role in shaping the future of technology. Their investments in AI research and development are fueling innovation and driving advancements that will impact every aspect of our lives.
Investors seeking exposure to AI’s growth potential can consider companies that have demonstrated a commitment to AI development. By carefully evaluating these companies’ strategies, track records, and market positions, investors can make informed decisions about allocating their capital towards AI-driven opportunities.
