New research is showcasing how corporate investment in AI likely won’t be going away any time soon.
Ernst & Young released its first AI Pulse Survey in July. This report checked in with senior business leaders across the country, evaluating how different businesses are adapting AI into the workforce.
While the Ernst & Young survey contained plenty of helpful information, a few key data points stood out as particularly important. First, 95% of senior leaders report that their organizations are currently investing in artificial intelligence. Furthermore, the survey found that leaders are seeing a significant positive impact from AI when it comes to operational efficiencies, employee productivity, and customer satisfaction.
The good news doesn’t stop there. The Ernst & Young survey noted that 30% of companies are expecting to spend more than $10 million or more on artificial intelligence next year. This represents nearly a twofold increase, as 16% of respondents are spending $10 million or more on AI this year.
“The world in which we do business has been forever altered by the emergence of generative AI,” added Dan Diasio, E&Y global artificial intelligence consulting leader. “Nearly all companies are investing in AI, but we’re seeing a divergence between companies experimenting in small ways and those making larger investments, with the leaders who continue prioritizing investments in AI increasingly ahead of the pack and experiencing positive returns.”
If this E&Y survey can offer any takeaway, it’s that corporate interest in AI is likely to continue going forward. As such, we believe investors may want to stay ahead of increased corporate AI spending by investing in an ETF with a designated AI focus.
Tackle AI Adoption with a Research-Driven Approach
For instance, one example is the Alger AI Enablers & Adopters ETF (ALAI). This is an actively managed fund that seeks to identify long-term growth opportunities through a distinct focus on companies actively involved in developing and implementing AI technologies. This can include companies involved in data center infrastructure, autonomous vehicles, and digital advertising, among others.
Notably, ALAI operates with a bottom-up focus, looking for companies that are uniquely positioned to benefit directly and indirectly from the growth of AI. The fund employs a proprietary research process that searches for a number of crucial factors that tend to contribute to long-term growth. Among others, these factors include rising market demand, strong competitive advantage, compelling business economics, and competent management.
This focus on fundamental research and bottom-up analysis puts ALAI’s portfolio in a position to potentially capitalize on growing corporate spending in AI. With the E&Y survey data implying corporate spending will continue to grow, we believe it could be beneficial to add ALAI to one’s portfolio before corporate AI adoption kicks into high gear.
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The views expressed are the views of Fred Alger Management, LLC (“FAM”) and its affiliates as of August 2025. These views are subject to change at any time and may not represent the views of all portfolio management teams. Views should not be interpreted as a guarantee of the future performance of the markets, any security or any funds managed by FAM. These views are not meant to provide investment advice and should not be considered a recommendation to purchase or sell securities. Holdings and sector allocations are subject to change. Past performance is not indicative of future performance.
Risk Disclosures: Investing in the stock market involves risks, including the potential loss of principal. Growth stocks may be more volatile than other stocks as their prices tend to be higher in relation to their companies’ earnings and may be more sensitive to market, political, and economic developments. Companies involved in, or exposed to, AI-related businesses may have limited product lines, markets, financial resources or personnel as they face intense competition and potentially rapid product obsolescence, and many depend significantly on retaining and growing their consumer base. These companies may be substantially exposed to the market and business risks of other industries or sectors, and may be adversely affected by negative developments impacting those companies, industries or sectors, as well as by loss or impairment of intellectual property rights or misappropriation of their technology. Companies that utilize AI could face reputational harm, competitive harm, and legal liability, and/or an adverse effect on business operations as content, analyses, or recommendations that AI applications produce may be deficient, inaccurate, biased, misleading or incomplete, may lead to errors, and may be used in negligent or criminal ways. AI technology could face increasing regulatory scrutiny in the future, which may limit the development of this technology and impede the future growth. AI companies, especially smaller companies, tend to be more volatile than companies that do not rely heavily on technology. A significant portion of assets will be concentrated in securities in related industries, and may be similarly affected by adverse developments and price movements in such industries. A significant portion of assets may be invested in securities of companies in related sectors, and may be similarly affected by economic, political, or market events and conditions and may be more vulnerable to unfavorable sector developments. Investing in companies of small and medium capitalizations involves the risk that such issuers may have limited product lines or financial resources, lack management depth, or have limited liquidity. The Fund is classified as a “non-diversified fund” under federal securities laws because it can invest in fewer individual companies than a diversified fund. Private placements are offerings of a company’s securities not registered with the SEC and not offered to the public, for which limited information may be available. Such investments are generally considered to be illiquid. Foreign securities involve special risks including currency fluctuations, inefficient trading, political and economic instability, and increased volatility. ADRs and GDRs may be subject to international trade, currency, political, regulatory and diplomatic risks. Active trading may increase transaction costs, brokerage commissions, and taxes, which can lower the return on investment. At times, cash may be a larger position in the portfolio and may underperform relative to equity securities.
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