ETFs
Wisdomtree AI ETF Updates List
Given its seemingly fearless rise to the $3 trillion market cap club, Nvidia (NVDA) is the most headline-grabbing stock in artificial intelligence (AI). As a result, many investors looking to play AI through exchange-traded funds often turn to funds heavy on this stock.
So far, this strategy has paid off, but there are other opportunities among AI ETFs that could reward patient investors. Consider the WisdomTree Artificial Intelligence and Innovation Fund (WTAI ). Home to nearly $270 million in assets under management, WTAI will celebrate its third anniversary in December.
Yes, Nvidia is the biggest hole in the WTAI, but with a weight of just over 3%. This is a sign that the WisdomTree ETF is taking a broader approach to the broader AI ecosystem. In the same vein, the WisdomTree Artificial Intelligence and Innovation Index – the underlying index of the WTAI – was recently rebalanced. This reconfiguration could allow WTAI to capitalize on a broader set of AI-related opportunities.
New look could benefit WTAI investors
Certainly, the WTAI rebalancing did not result in drastic changes. It also did not lead the ETF to take positions in highly speculative stocks. The ETF’s roster is still largely comprised of established, quality companies. Beyond Nvidia, the top 10 titles include meta-platforms (META), the alphabet (GOOG) and Broadcom (AVGO), among others.
This alone is a testament to WTAI’s ability to capture a broad range of quality AI names, but the fund’s rebalancing is noteworthy because it includes a pivot to what could represent the next round of significant AI innovation. of AI.
“Other innovations have a greater likelihood of impacting these types of fundamentals over a shorter time horizon. While we never know anything about the future with certainty, we don’t want a whole portfolio of deeper technology sectors where we can’t credibly demonstrate that they can deliver much, if at all, of commercial value over the next two years. wrote Christopher Gannatti, Global Head of Research at WisdomTree. “It is important to combine longer-term innovation time horizons (such as commercially available quantum computing systems and fully personalized medicine) with shorter- and medium-term innovation time horizons (such as of AI running directly on smartphones and laptops). »
As Gannatti noted, WTAI’s top 10 stocks (and others) score well when assessing their abilities to deliver AI tools. With Apple (AAPL), another WTAI member company, promising to strengthen its AI game, this scenario could improve.
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AI and smart devices intersect
Additionally, WTAI could benefit from the intersection of AI and smart devices, including phones and tablets. This intersection is still in its infancy, but could become more important later this year and in 2025.
“We think it’s possible that people, in the second half of 2024 and into 2025, will get excited about the concept of ‘AI on devices’ and refresh their laptops and smartphones,” concluded Gannatti. “If we are correct in this thesis, an important milestone will be Apple’s WWDC event in June 2024, where we expect a series of AI announcements. While not yet confirmed, we’re excited to see what AI features might be in the iPhone 16, which is expected to be released later in 2024.”
_This article was prepared as part of WisdomTree’s paid general sponsorship of VettaFi | ETF Trends. This specific content and any opinions expressed therein belong solely to VettaFi and do not reflect the opinion or analysis of WisdomTree, its employees, or its affiliates. Content published on VettaFi | ETF Trends is provided for educational purposes only and should not be considered investment or tax advice. For investment or tax advice, please consult a financial professional. _
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