AI, growth engine of ETFs in the next decade

Artificial Intelligence (AI) is booming, and investors are increasingly betting on Exchange-Traded Funds (ETFs) focused on this promising sector. Given the exponential growth prospects of AI, specialized ETFs are promised a bright future.

AI-focused ETFs Attract Investors

Artificial Intelligence (AI) has been increasingly successful in recent years. Between ease of use, technical feasibility, and the ever-growing range of applications, this sector is generating ever-greater interest from the general public and investors. This enthusiasm for AI has direct repercussions on the promising ETF market sector.

Eric Balchunas, a renowned analyst at Bloomberg, predicts that AI and robotics will dominate the Exchange-Traded Funds (ETFs) market over the next decade. Recent advancements in the field, such as the conversational software ChatGPT, are indeed attracting investors to these future-oriented themes.

“The unbridled imagination of investors, combined with the explosion in demand for AI services, creates ideal conditions for specialized ETFs to take off quickly,” analyzes the expert.

Aware of the lucrative potential of artificial intelligence, the Silicon Valley giants are following suit. Apple is reportedly working on launching its own AI products to ride the wave. Google has just unveiled an improved version of its Gemini software powered entirely by AI algorithms. Microsoft, for its part, continues to aggressively expand its portfolio in the field of conversational agents.

Almost all publicly traded tech giants are now seeking to profit from AI in one form or another. For now, these products generate modest revenues for these multinationals, but the global AI market could literally explode by 2024 according to analysts. Investors are already anticipating this dramatic growth by positioning themselves in ETFs dedicated to this strategic sector.

Nvidia’s Performance, AI Barometer

The recent financial results of Nvidia show just how much artificial intelligence can energize the revenues of tech giants. In the last fiscal quarter, the California-based company recorded a colossal revenue of $22.1 billion, with $5.16 of adjusted net income per share.

These astronomical sums are largely due to sales of AI products developed by Nvidia, including the famous Graphics Processing Units (GPUs) used to train machine learning algorithms.

For the fiscal year 2022, Nvidia generated no less than $27 billion in revenue. These staggering figures are further proof of the enormous financial potential of artificial intelligence for digital giants. They also explain why investors were already flocking massively to the sector’s ETFs.

With an expected average annual growth rate of over 37.3% by 2030, AI is clearly establishing itself as the new technological El Dorado for the coming years. Its rise in power should continue to boost the profits of ETFs dedicated to this strategic sector and potentially offer very juicy returns to savvy investors. 

There is no doubt that this promising technology will shape the world of tomorrow. And in that sense, AI-focused ETFs probably have many good days ahead of them.