When investing history looks back on 2023, it’s possible the year will be remembered as the dawn of the artificial intelligence (AI) investing movement. Dawn implies a start. With that in mind, it’s possible there will be much in store when it comes to investing in 2024.
That could spell opportunity with exchange traded funds such as the Invesco QQQ Trust (QQQ) and the Invesco NASDAQ 100 ETF (QQQM). Both ETFs follow the Nasdaq-100 Index (NDX), a gauge that’s chock full of large-cap growth companies with significant AI inroads. As such, QQQ and QQQM are each up nearly 50% year-to-date.
Obviously, that’s an impressive showing. Asking for it to repeat next year could easily be considered demanding, but artificial intelligence is still in its infancy. It’s possible that the theme will remain a key driver of QQQ/QQQM performance next year. That scenario could be heightened as AI is adopted by and intersects with more industries.
2024 Could Be Big Year for AI
What makes artificial intelligence exciting is the potential it has to transform an array of industries. Financial services stands as a prime example. That’s meaningful to investors because many asset managers and banks have the capital needed to embrace AI in full force.
“The financial industry is experiencing a paradigm shift with the integration of AI technologies. Machine learning algorithms, natural language processing, and predictive analytics are revolutionising processes, from risk management to customer service,” noted deVere Group CEO Nigel Green. “AI-driven insights enable financial institutions to make data-driven decisions, enhance fraud detection, and streamline operations. Investors should consider seizing potential opportunities in this sector by looking at investments in fintech companies and financial institutions embracing AI to gain a competitive edge.”
Green adds that healthcare and industrials are among the other sectors that could derive benefits from broader artificial intelligence adoption. That’s meaningful to QQQ and QQQM not only because the ETFs have modest allocations to those sectors, but also because it broads the field of potential AI clients for tech companies residing in the ETFs.
“Industries integrating AI are likely to experience unprecedented innovation, creating opportunities for investors to capitalise on the growth of forward-thinking companies at the forefront of technological advancement,” concluded Green. “Companies embracing AI technologies gain a competitive edge by improving efficiency, reducing costs, and enhancing decision-making processes. Investors positioning their portfolios in such companies could benefit from their ability to outperform industry peers.”
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