Traders eyeing potential plays in the new year may want to look at the healthcare sector given its growing adoption of artificial intelligence (AI). Technological advancement in healthcare should spell opportunities in the Direxion Daily Healthcare Bull 3X ETF (CURE) and the Direxion Daily Robotics, Artificial Intelligence & Automation Index Bull 2X ETF (UBOT).
During the height of the COVID-19 pandemic, healthcare offered traders a prime play before 2022’s bearish run that hit all sectors. The industry still offers a fundamental play during up and down markets, but the injection of AI offers a tinge of growth that could be forthcoming in the new year.
“This year, we saw AI, ChatGPT and VR dominate tech conversations,” said Doug Hirsch, co-founder and chief mission officer at GoodRx in Mobile Health News. “And I’m sure we’ll continue to see consumers and the health system embrace these solutions in some way, shape or form next year. But I really think the industry should prioritize applying the technology that solves our most fundamental healthcare challenges.”
“That doesn’t necessarily mean we need the flashiest technology,” he added. “In fact, the shiniest solutions often are not immediately scalable, and therefore, their promise to better our healthcare system lies multiple years down the road. My hope is we’ll see more smart applications of AI that increase transparency within the healthcare system.”
Leveraging Both Industries
CURE and UBOT both offer traders additional leverage to maximize profit potential on their bullish convictions. In the case of CURE, it seeks daily investment results equal to 300% of the daily performance of the Health Care Select Sector Index. The index includes domestic companies from the healthcare sector, such as pharmaceuticals, healthcare equipment and supplies, healthcare providers and services, biotechnology, life sciences tools and services, and more.
While healthcare is often seen as a safe haven sector conducive to long-term investing, technological breakthroughs such as the advancement of AI technology can provide short-term bursts of opportunity for traders.
In the meantime, the growing narrative of AI should continue in 2024, giving traders plenty of opportunities in UBOT irrespective of what sector it’s affecting. The ETF seeks daily investment results that equal to 200% of the daily performance of the Indxx Global Robotics and Artificial Intelligence Thematic Index. That index aims to provide exposure to companies in developed markets expected to benefit from the growing adoption and use of robotics and/or AI.
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