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Looking Beyond the Usual: Investing in AI Isn’t Just About Big Tech

Okay, so you’ve heard about the boom in artificial intelligence (AI). It’s pretty much the biggest thing in tech these days. Big companies like Microsoft, Tesla, and Meta Platforms are all heavily involved. But if you want to get in on the action, you’ve got other options too. In this article, we’ll talk about other ways you can invest in AI, with tips from two pros in the field: Rich Lee from Baird and Todd Rosenbluth from VettaFi.

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More Ways to Bet on AI

AI is big news, and not just in tech. It’s spreading to other industries too. Both Lee and Rosenbluth agree that investors now have more options to choose from, with many industries benefiting from AI.

1. Healthcare – Not Just About Doctors and Medicine

Healthcare is one area where AI is making a big splash. AI can help doctors diagnose diseases, make treatment plans, and offer personalized medicine. As more and more healthcare organizations use AI, you can consider investing in ETFs (exchange-traded funds) that include companies working in this area.

2. eCommerce – More than Just Shopping Online

eCommerce is another industry where AI is making waves. It’s used to improve customer experiences, manage supply chains, and make delivery processes better. Companies in eCommerce are using AI for stuff like recommending products to customers, managing inventory, and improving delivery. You could consider adding ETFs with eCommerce companies to your AI investment.

3. Robotics and Automation – Robots Everywhere!

AI is also transforming robotics and automation. Robots powered by AI are now used in many industries like manufacturing, logistics, and services. With more automation happening everywhere, you could explore ETFs that include companies pushing the boundaries in this field.

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Some ETFs You Might Want to Check Out

When thinking about where to put your money in AI, you might want to consider ETFs that are connected to the industries we talked about. Here are two you could check out:

  1. Global Robotics and Automation Index ETF (ROBO):
  • This ETF could benefit from the growing use of robots and automation.
  • It includes companies pushing the boundaries in robotics across different industries.
  • So far this year, it’s made a 21% gain.
  1. Global X Robotics & Artificial Intelligence ETF (BOTZ):
  • This ETF focuses on companies making strides in robotics and AI.
  • It offers a mix of companies worldwide that are using automation and AI.
  • So far this year, it’s made a 34% gain.

Fintech: Banking on AI

AI is also changing fintech (financial technology). AI solutions are changing the way financial services work, helping assess risks, detect fraud, and improve the customer experience. They also help financial advisors and investors make better decisions. You can consider ETFs that include fintech companies using AI.

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AI and Factories

AI is also being used in the industrial sector, helping companies automate their processes. Industrial companies are using AI to improve efficiency and save costs. If you’re interested in this area, you can look at ETFs with companies integrating AI into industry.

The Future of Investing in AI

AI is affecting lots of industries. There are opportunities in healthcare, eCommerce, robotics, automation, fintech, and industrial processes. By investing in a mix of these areas, you can spread your risk and potentially increase your returns.

But remember: investing in AI requires careful thought and research. Make sure you look into the ETFs that fit your investment goals and risk level. Stay informed about AI trends and new developments, as this field is always changing.

To wrap up, investing in AI isn’t just about buying shares in big tech companies. By focusing on different sectors and keeping an eye on the trends, you can make smart investments in the world of AI.

Disclaimer: Remember, investing in stocks is risky, and the value of your investment can go up and down. Always get advice from a financial advisor before you invest. The ETFs we talked about here are just examples and not specific investment advice. Past performance doesn’t guarantee future results. Always do your homework before investing.

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Frequently Asked Questions

Q1: Why should I consider investing in AI?

A: AI is a rapidly growing field that’s becoming integral to a wide range of industries, from healthcare to ecommerce. As such, many analysts believe it offers significant investment opportunities.

Q2: Does investing in AI mean I have to invest in big tech companies like Microsoft and Meta Platforms?

A: No. While these companies are heavily involved in AI, there are numerous other sectors and companies that are using AI and offer investment opportunities. Examples include healthcare, ecommerce, robotics, automation, fintech, and industrial sectors.

Q3: What’s an ETF and why should I consider investing in one?

A: ETF stands for Exchange Traded Fund. It’s a type of investment fund that’s traded on stock exchanges, much like individual stocks. ETFs are a way to invest in a diversified portfolio without having to buy each individual stock. They can provide exposure to specific sectors or industries, like AI, without requiring a large amount of capital.

Q4: How can I find the right AI-focused ETF for me?

A: Start by identifying your investment goals and risk tolerance. Then, research various ETFs that focus on AI-related sectors, paying attention to their past performance, their holdings, and how they align with AI trends. Remember, it’s always a good idea to seek advice from a financial advisor before making any investment decisions.

Q5: How is AI influencing healthcare?

A: AI is used in healthcare for disease detection, treatment plans, and personalized medicine. It’s helping to improve patient care and outcomes.

Q6: How is AI impacting ecommerce?

A: AI is being used in ecommerce to enhance customer experiences, streamline supply chains, and improve logistics. For example, AI can be used to provide personalized product recommendations or automate inventory management.

Q7: What role does AI play in robotics and automation?

A: AI is driving advances in robotics and automation across a range of industries. AI-powered robots can optimize manufacturing processes, improve logistics, and even offer services.

Q8: What are some of the risks of investing in AI?

A: Like all investments, investing in AI carries risk. The value of your investment can fluctuate, and past performance doesn’t guarantee future results. AI is a rapidly evolving field, and its future is subject to technological and regulatory developments. It’s important to do thorough research and consider seeking advice from a financial advisor before investing in AI.

Sources CNBC