ROBO Global Artificial Intelligence ETF warrants a sell due to sub-optimal company selection, high expense ratio, and limited diversification. THNQ lacks mega-cap AI-focused companies such as Meta, Apple, and Microsoft, leading to sub-optimal returns compared to IGPT and AIQ. AIQ and IGPT are better positioned for future AI growth due to their focus on AI investment, patents, and acquisition capacity.
The market reacted exuberantly to the Project Stargate announcement, heralding $500 billion of AI infrastructure investment. Then, investors got a wake-up call, when Chinese artificial intelligence firm DeepSeek released its new AI model.
The ROBO Global THNQ Artificial Intelligence index concluded 2024 with a 5.75% return in Q4, outperforming the Vettafi Full World Index's -0.95% quarterly return. The index posted a 19.4% annual gain, modest compared to 2023's 57% surge.
ROBO Global Artificial Intelligence ETF offers broader exposure to AI innovation compared to the highly concentrated Magnificent Seven ETF. THNQ's diversified holdings across the maturing AI value chain and potential for higher growth make it a better investment after considering risks. I consider that THNQ could gain by 11.36%, or half the percentage by which it has underperformed MAGS during the last year.
With much of the artificial intelligence hype centered around Nvidia, it's been easy to miss other beneficiaries of the AI boom. AI investors looking to potentially diversify their exposures beyond the vaunted AI chipmaker should consider these five overlooked opportunities.
Outside of all the noise, the near weekly new announcements of groundbreaking, benchmark-climbing AI models (Llama 3.1, Mistral Large 2), what's happening under the hood in AI is a rapid expansion of capabilities and applications across various sectors. From autonomous vehicles to enhanced cybersecurity, AI is quietly revolutionizing industries and solving complex problems.