AI Investment Theme Extending Beyond U.S. Borders

There’s no question that artificial intelligence (AI) has been one of the prevailing themes in the 2024 market rally. This has only expanded from last year. Now it appears Wall Street’s giants are looking for other AI opportunities. They are heading outside U.S. borders as firms look for the next big AI thing overseas.

One of the prime locations to search for AI opportunities is in emerging markets (EM). With looming interest rate cuts, broad EM assets present a prime opportunity for growth in the coming years. However, when you add the additional catalyst of AI, the next AI opportunity in EM could be even more appealing.

“Some of the world’s biggest money managers are searching for the next wave of artificial intelligence winners beyond the US,” Bloomberg reported. “At a time when the global euphoria about AI has propelled a three-fold surge in Nvidia Corp. and a 50% jump in a key US index for semiconductor manufacturers in less than a year, investors are pointing toward emerging markets for better value and a bigger pool of options.”

Of course, much of the AI hype has been boosting stocks that support the technology. That said, Nvidia usually pops up first when traders are looking to play off the growth of the AI theme. To maximize profits and a bit more leverage, they may want to add the Direxion Daily NVDA Bull 2X Shares (NVDU) as part of their arsenal of market tools. The fund doubles exposure to the stock to extract more profits should Nvidia continue climbing.

2 More Trades to Consider

Traders who want to get broader and play off the broad theme of AI should consider the Direxion Daily Robotics, Artificial Intelligence & Automation Index Bull 2X ETF (UBOT). The fund seeks daily investment results equal to 200% of the daily performance of a couple of indexes. These would be 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.

On the topic of emerging markets, traders can leverage their growth with three times the exposure using the Direxion Daily MSCI Emerging Markets Bull 3X Shares (EDC). The fund seeks daily investment results equal to 300% of the inverse performance of the MSCI Emerging Markets Index. It is designed to represent the performance of large — and midcap securities across emerging market countries.

NVDU Chart - U.S. Borders

NVDU data by YCharts

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