On the positive side of the 2023 investing ledger, one of the clear buzz phrases emerging is artificial intelligence (AI). Or to be more specific, “generative AI,” which is an algorithm-driven form of machine learning.
The potential industrial applications of generative AI are nearly limitless and that could usher in a new investment – one that may already be springing to life. Stock picking to this effect, however, could be burdensome for many investors, highlighting the benefits of accessing generative AI investments via the exchange traded funds wrapper.
While there is a slew of AI ETFs on the market today, they aren’t carbon copies of one another and investors need to be selective. Enter the ARK Autonomous Technology & Robotics ETF (ARKQ). The $926.2 million ARKQ turns nine years old in September. That’s almost “ancient” in AI ETF terms, but it proves ARKQ’s staying power and relevance in this ETF category.
Speaking of relevance, ARKQ has plenty of that today because some analysts and market observers are viewing the current state of affairs in the generative AI space as comparable to an “iPhone moment,” drawing parallels to the debut of the now ubiquitous smartphone in 2007.
“But I do think the iPhone analogy is apt, for two reasons. One, what we’re talking about today with generative AI is more foundational technologies,” noted Morgan Stanley’s Keith Weiss. “You can almost think about that as the operating system on the mobile phone like the iOS operating system. And what we’ve heard all week long is companies are really seeing opportunity to create new apps on top of that operating system, new use cases for this generative AI. The other reason why this is such an apt analogy is, like the iPhone, this is really capturing the imagination of not just technology executives, not just investors like you and I, but everyday people.”
Adding to the long-term allure of ARKQ as a play on the generative AI revolution are the myriad applications this technology can enhance and make more efficient. Morgan Stanley’s Brian Nowak details some of the usage cases for generative AI that could be of note to some ARKQ member firms.
“We see new creator tools, generative AI is going to enable people to make not only static images but more video-based images across the entire economy. So people will be able to express themselves in more ways across social media, which will drive more engagement and ultimately more monetization for those social media platforms. We see e-commerce companies being able to better match inventory to people,” he said.
One way of looking at that is that while any move to the upside won’t occur in a straight-line fashion, ARKQ has pathways to appreciation thanks to generative AI.
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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.