of S&P500 achieved a 24% return in 2023. This was more than double his average annual profit since the company's founding in 1957. But it was killed off by tech giants like; Nvidia, Amazon, microsoftand meta platform (To name a few):
NVDA data by YCharts
What do these companies have in common? They are leaders in the artificial intelligence (AI) industry. Nvidia designs the most popular semiconductor hardware for data center AI workloads, and companies like Amazon and Microsoft are bringing some of the most powerful AI models to enterprises through cloud computing platforms. We are distributing it.
Investors have many quality AI stocks to choose from, but the speed at which this new industry moves makes it difficult to separate the winners from the losers over the long term.
Exchange traded funds can help solve that problem
Rather than building a portfolio of individual stocks, buying an exchange-traded fund (ETF) can be a better option. ETFs can provide investors with the best exposure to his AI companies and are managed by experts who adjust the portfolio as needed.
Additionally, ETFs can hold dozens or even hundreds of stocks, so one underperforming company won't cause catastrophic financial losses for investors. This is an important advantage because failure is inevitable in any new technological revolution.
of Global X Artificial Intelligence and Technology ETF (AIQ -0.15%) It could be a great choice for investors. Not only does the company own stocks in nearly every leader in the AI industry, it also outperforms the S&P 500 in the short and long term.
This ETF owns some of the most popular AI stocks
Global X Artificial Intelligence and Technology invests in companies that benefit from AI and the hardware providers that support their development. The firm holds 84 stocks for him, but the top 10 stocks account for 33% of his total portfolio.
This level of concentration can make the ETF susceptible to declines in just a few stocks.However, the top 10 who is who In the world of AI:
|
stock |
ETF portfolio weighting |
|---|---|
|
1. Nvidia |
4.23% |
|
2. meta platform |
3.6% |
|
3. Netflix |
3.5% |
|
Four. Amazon |
3.24% |
|
Five. oracle |
3.14% |
|
6. tencent holdings |
3.12% |
|
7. Qualcomm |
3.09% |
|
8. IBM |
3.08% |
|
9. sales force |
3.06% |
|
Ten. broadcom |
3.02% |
Data source: Global X. Portfolio weightings are accurate as of March 27, 2024 and are subject to change.
Considering Nvidia has historically created more value than any other company in the industry, it's no surprise that it ranks at the top of the AI ETF. Meta ranks second because social media platforms Facebook and Instagram have AI in their content recommendation engines, helping advertisers create more engaging content. Additionally, Meta continues to develop an open source AI model called Llama, which may power several new features in the future.
I think Oracle is an AI stock with incredible potential because it operates the most efficient data center infrastructure that allows developers to quickly build AI models at a relatively low cost. I believe. Meanwhile, Broadcom is working on AI on a number of fronts.
Outside of the fund's top 10 holdings, investors will find Microsoft. alphabet, appleand tesla. I also own ETFs micron technologyis becoming increasingly important as an AI semiconductor stock. C3.aiwhich is a small (but growing) enterprise AI stock.
Global X's artificial intelligence and technology outperforms the S&P 500
Major AI stocks hit big, leading to Global X artificial intelligence and technology delivering market-beating returns. This has outperformed the S&P 500 year-to-date and on a one-year and five-year basis.
|
musical instrument |
2024 Year to Date Revenues |
1 year return |
5-year rate of return (CAGR) |
|---|---|---|---|
|
Global X Artificial Intelligence and Technology ETF |
11.8% |
48.5% |
15.2% |
|
S&P500 |
10.8% |
32.3% |
13.1% |
Data sources: Global X, Google Finance, Officialdata.org. CAGR = compound annual growth rate.
Past performance is not a predictor of future results. However, Wall Street released his startling predictions about the economic potential of AI. goldman sachs believes this technology will add $7 trillion to the global economy over the next decade. Consulting firm PwC believes it will add $15.7 trillion to the economy by 2030, and Cathie Wood's Ark Invest puts the number at a whopping $200 trillion.
Global There is a possibility. However, if the AI fails to live up to the hype, the ETF could significantly underperform.
That's the risk of owning a highly concentrated ETF, so it's a good idea to buy Global X Artificial Intelligence and Technology as part of a diversified portfolio of other ETFs (or individual stocks outside the AI sector) maybe.
John Mackey, former CEO of Amazon subsidiary Whole Foods Market, is a member of the Motley Fool's board of directors. Randi Zuckerberg is a former head of market development and spokesperson at Facebook, sister of Meta Platforms CEO Mark Zuckerberg, and a member of the Motley Fool's board of directors. Alphabet executive Suzanne Frye is a member of The Motley Fool's board of directors. Anthony Di Pizio has no position in any stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Goldman Sachs Group, Meta Platforms, Microsoft, Netflix, Nvidia, Oracle, Qualcomm, Salesforce, and Tesla. The Motley Fool recommends Broadcom, C3.ai, and International Business Machines and recommends the following options: His long January 2026 $395 call on Microsoft and his short January 2026 $405 call on Microsoft. The Motley Fool has a disclosure policy.
