The Forbes company Q.ai uses an AI analytics methodology that identifies investing opportunities. Right now, it’s liking semiconductors.
More specifically, Q.ai likes the VanEck Vectors Semiconductor ETF (SMH) and the iShares PHLX Semiconductor ETF (SOXX). AI or not, it’s difficult to not like the semiconductor space with the way the sector is performing.
Chip supply has fallen behind demand.
“Tech stocks have had an up and down ride ever since Pfizer announced the efficacy of its vaccine back in November,” a Forbes article noted. “Coupled with inflation fears, rising bond yields, and potential tax hikes, the outlook for tech is cloudy. Not to mention, we have a global chip shortage that could prove to be a significant challenge for high-growth stocks to meet lofty production goals.”
Nonetheless, there’s no denying the need for tech. Whether it’s in everyday life or as a portfolio play, tech is where it’s at, and semiconductors are the way to get to it.
“While there are unanswered questions for tech stocks, and the sentiment is mixed, there is still a lot to like about specific tech sectors,” the article said. “Q.ai’s deep learning algorithms have identified several of the top US Tech Smart Beta ETFs based on fund flows over the last 90-days, 30-days, and 7-days. We’ve rated one ETF as Best, three as Good, four as Caution, and two as Poor.”
“All In” on Chips
Tabbed the “best” according to Q.ai is SMH, which seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the MVIS® US Listed Semiconductor 25 Index. The fund normally invests at least 80% of its total assets in securities that comprise the fund’s benchmark index.
The index includes common stocks and depositary receipts of U.S. exchange-listed companies in the semiconductor sector. Such companies may include medium-capitalization companies and foreign companies that are listed on a U.S. exchange.
A “Good” investment, according to Q.ai, is SOXX, which seeks to track the investment results of the PHLX Semiconductor Sector Index (SOX), which is composed of U.S. equities in the semiconductor sector.
The fund generally invests at least 90% of its assets in securities of the underlying index and in depositary receipts representing securities of the underlying index. The underlying index measures the performance of U.S.-traded securities of companies engaged in the semiconductor business.