High interest rates and investors’ desire to see strong balance sheets, buybacks or dividends can act as headwinds to corporate technology expenditures, but there’s no getting around the point that some of those expenditures are essential. Put artificial intelligence (AI) in the “essential” category.
Chief technology officers (CTOs) know as much and their rising commitments to artificial intelligence spending could positive long-term implications for exchange traded funds such as the Invesco QQQ Trust (QQQ) and the Invesco NASDAQ 100 ETF (QQQM).
The Invesco ETFs, both of which track the Nasdaq-100 Index (NDX), are highly relevant in the AI spending conversation because the funds count an assortment of artificial intelligence enablers among their holdings. Think companies such as Nvidia (NVDA), Amazon.com Inc. (AMZN) and Microsoft (MSFT), among others. With AI adoption still in its early innings, the same is true of related spending, indicating QQQ and QQQM could be in for long-term growth.
For Some QQQ/QQQM Holdings, AI Spending Looks Good
AI spending trends aren’t linear from one company to another, but the latest edition of the CNBC Technology Executive Council bi-annual survey confirms a robust overall outlook for AI-related expenditures and that could be potent for QQQ and QQQM.
“Sixty percent of the select group of companies responding to the survey described generative AI as critically important to their business, and artificial intelligence is the single-largest technology spending budget line item for the next year at 44% of companies. Sixty percent of survey respondents described their new AI investments as ‘accelerating,” reportsed Eric Rosenbaum for CNBC.
