As the world continues to embrace digital transformation, AI is at the forefront of technological advancement, driving innovation across various industries. For investors looking to capitalize on this burgeoning field, AI ETFs offer a compelling opportunity to gain exposure to a diversified portfolio of AI-related companies.
Amid this backdrop, it could be ideal to buy AI-focused ETFs Amplify AI Powered Equity ETF (AIEQ), ROBO Global Robotics & Automation Index ETF (ROBO), and iShares Robotics and Artificial Intelligence Multisector ETF (IRBO) for substantial growth.
Artificial intelligence is not merely a buzzword but a transformative force reshaping industries and driving significant technological breakthroughs. From healthcare and finance to manufacturing and transportation, AI revolutionizes processes, enhances efficiencies, and advances progress across various sectors.
According to a report by Bloomberg Intelligence, the generative AI market is expected to reach $1.3 trillion by 2032 as it drives sales for the tech industry’s hardware, software, services, ads, and gaming segments at a CAGR of a staggering 43%.
Moreover, in the recent McKinsey Global Survey on AI, 65% of respondents indicate that their organizations regularly utilize generative AI, about double the rate reported in its previous survey just ten months ago. Companies are experiencing material benefits from gen AI use, reporting cost reduction, and revenue surge in the business units that have adopted the technology.
Thus, investors could consider buying top-performing AI ETFs like AIEQ, ROBO, and IRBO to capitalize on the ongoing AI boom.
Let’s discuss the fundamentals of these ETFs in detail:
Amplify AI Powered Equity ETF (AIEQ)
AIEQ tracks an index that holds the U.S. companies of any market cap selected using a proprietary, quantitative model based on artificial intelligence. Leveraging the power of AI, it analyzes more than 1 million data points daily, across news, social media, industry and analyst reports, financial statements on nearly 6,000 U.S. companies, technical, macro, and market data.
AIEQ tracks the performance of the Powered Equity Index. The ETF has assets under management (AUM) of $96.60 million. The fund has a total of 118 holdings. Its top holdings include Oracle Corporation (ORCL) with a 6.16% weighting, Monolithic Power Systems, Inc. (MPWR) at 4.48%, followed by Wells Fargo & Company (WFC) with a 4.39% weighting.
The fund has an expense ratio of 0.75% compared to the category average of 0.48%. Over the past three months, AIEQ fund outflows came in at $3.56 million, and $8.90 million over the past six months. Also, the ETF has a beta of 1.18.
AIEQ has gained 3.3% over the past six months and 4.6% over the past year to close the last trading session at $33.35. It has a NAV of $33.35 as of August 7, 2024.
AIEQ’s POWR Ratings reflect this promising outlook. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
AIEQ has a B grade for Buy & Hold. Of the 169 ETFs in the All Cap Equities ETFs group, it is ranked #97.
To access AIEQ’s POWR Ratings for Peer and Trade, click here.
ROBO Global Robotics & Automation Index ETF (ROBO)
ROBO invests in global companies that are driving transformative innovations in robotics, automation, and artificial intelligence (RAAI), including those that create technology to enable intelligent systems that can sense, process, and act and companies that apply those technologies to deliver RAAI-enabled products like robots to consumers and businesses.
ROBO tracks the performance of the ROBO Global Robotics and Automation TR Index. With $1.06 billion in AUM, the fund’s top holdings include Intuitive Surgical, Inc. (ISRG) with a 2.08% weighting, followed by ServiceNow, Inc. (NOW) at 2.02%, and Zebra Technologies Corporation Class A (ZBRA) and Kardex Holding AG (KARN) at 1.97% and 1.93%, respectively.
The ETF currently has 79 holdings in total. Over the past three months, ROBO’s fund outflows were $33.49 million. In addition, its expense ratio of 0.95% compares to the 0.64% category average. The ETF’s NAV was $51.78 as of August 6, 2024.
The fund has gained 4.8% over the past nine months to close the last trading session at $50.92. It has a beta of 1.25.
ROBO’s fundamental strength is reflected in its POWR Ratings. The ETF has a grade B for Buy & Hold. The fund is ranked #51 out of 119 ETFs in the Technology Equities ETFs group.
Click here to access ROBO ratings (Peer and Trade).
iShares Robotics and Artificial Intelligence Multisector ETF (IRBO)
IRBO provides exposure to an equal-weighted index composed of companies in developed or emerging market countries that stand to benefit from the long-term growth and innovation in robotics technologies and artificial intelligence.
The ETF tracks the performance of the NYSE FactSet Global Robotics and Artificial Intelligence Index. IRBO has an AUM of $559.90 million. The fund has a total of 103 holdings. Its top holdings include Lumen Technologies, Inc. (LUMN) with a 2.23% weighting, Hello Group Inc. (MOMO) at 1.30%, and Sirius XM Holdings, Inc. (SIRI) and JOYY, Inc. (YY) at 1.28% and 1.24%, respectively.
IRBO has an expense ratio of 0.47%, lower than the category average of 0.64%. Over the past six months, its fund outflows were $8.92 million, and $119.97 million over the past year. Also, it has a beta of 1.13.
IRBO has gained 1.7% over the past nine months to close the last trading session at $31.02. The fund has a NAV of $31.09 as of August 7, 2024.
IRBO’s POWR Ratings reflect this strong outlook. The ETF has a grade of B for Buy & Hold. Of the 119 ETFs in the Technology Equities ETFs group, IRBO is ranked #55.
To access all the POWR Ratings for IRBO, click here.
What To Do Next?
43 year investment veteran, Steve Reitmeister, has just released his 2024 market outlook along with trading plan and top 11 picks for the year ahead.
AIEQ shares were unchanged in premarket trading Thursday. Year-to-date, AIEQ has declined -5.91%, versus a 9.81% rise in the benchmark S&P 500 index during the same period.
About the Author: Mangeet Kaur Bouns
Mangeet’s keen interest in the stock market led her to become an investment researcher and financial journalist. Using her fundamental approach to analyzing stocks, Mangeet’s looks to help retail investors understand the underlying factors before making investment decisions.
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