The e-commerce landscape is dominated by behemoths like Amazon and Walmart. However, there are a number of rising players that have made inroads. One of them is Shopify (NYSE: SHOP). If you have ever clicked on an advertisement on Facebook or Instagram and subsequently made a pur
Retiring a millionaire is a goal for many investors, because it is a threshold many feel is necessary to retire comfortably. While it's possible to reach this status with market-tracking funds like ETFs, individual stocks can achieve this goal much faster by picking the correct o
For Immediate ReleaseChicago, IL – May 18, 2023– Zacks Director of Research Sheraz Mian says, "Earnings estimates for full-year 2023 appear to have reversed course lately after consistently coming down for almost a year from the April 2022 peak."
Google parent company Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) is no stranger to artificial intelligence (AI). The technology giant made it a focus years ago, using AI to improve everything from its searches to its offerings to potential advertisers. And just last week, Alphabet w
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Are you seeking a relatively safe way to invest in this uncertain economic environment? In that case, investing in one of the mega-cap FAANG stocks is an excellent idea, as they have the resources to weather any market downturn.
Launched on 07/24/2000, the iShares Core S&P U.S. Value ETF (IUSV) is a smart beta exchange traded fund offering broad exposure to the Style Box - All Cap Value category of the market.
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You don't have to be a billionaire to invest like Warren Buffett. Actually, you don't need much money at all to follow in the legendary investor's footsteps.
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Between earnings season and a constant barrage of economic data releases, it's easy for investors to feel overwhelmed by the amount of information thrown their way. What you might not realize is that one of the most important information releases of the entire quarter occurred ju
Amazon Web Services (AWS), the cloud computing division of Amazon.com Inc, said on Thursday it plans to invest 1.06 trillion rupees ($13 billion) in India by 2030, doubling down on its past investments to cater to an ever-growing demand.
Advances in
artificial intelligence (AI) have captured the imagination of the market and the general public alike in 2023, so it’s no surprise that AI-focused ETFs are enjoying solid year-to-date gains. With just $13 million in assets under management (AUM), the
WisdomTree Artificial Intelligence and Innovation Fund (
BATS:WTAI)
could be a hidden gem among these funds. Here’s why there’s plenty to like about this tiny, under-the-radar ETF.
AI is Just Getting Started
WisdomTree writes that AI “is a transformative megatrend that has the potential to influence nearly all aspects of how we live and work globally in the years to come.”
And while AI offers plenty of long-term growth potential, it’s also being used in plenty of applications that are impacting our lives and businesses today -- whether it’s chatbots like
ChatGPT, self-driving technology in cars, industrial automation, or workflow automation software.
Legendary investor Stanley Druckenmiller, who reportedly returned 30% annually over a 30-year timeframe while running Dusquense Capital, recently said that AI could be “every bit as impactful as the internet.” He also said that while he believes we are in for a “hard landing” economically, AI leaders like Nvidia (
NASDAQ:NVDA
) and Microsoft (
NASDAQ:MSFT
) could be “unbelievable opportunities” coming out of a hard landing.
Further, he noted that even if there is a major recession, Nvidia's opportunity in AI is so compelling that he's not convinced that Nvidia’s share price will go down, even though it sports a high price-to-earnings multiple.
Thoughtful Diversification
WTAI offers investors a diversified and comprehensive way to gain exposure to AI. Not only does it hold 76 different stocks, but it’s also not overly concentrated toward its top positions like some other AI-themed ETFs. Its top 10 holdings make up just 22.6% of the fund, which means that investors aren’t left overly exposed to the ups and downs of a few large holdings. Top position Nvidia accounts for just a 3% weighting, which is reasonable.
Another thing I like about WTAI’s holdings is that it invests across a wide-ranging swath of today’s AI universe. WisdomTree says that the WTAI ETF "seeks to offer precise access to the AI megatrend through direct investment in publicly listed firms all over the globe that are focused on capitalizing on AI in a diverse array of technologies and applications.”
WTAI places its investment focus in AI across four key areas -- AI software, semiconductors, hardware (which would include the likes of autonomous vehicles, drones, robotics, and industrial automation), and what it calls “innovation,” an all-encompassing category that could include any company using AI to disrupt existing industries.
Below, you’ll find a snapshot of
WTAI’s top holdings using TipRanks’ holdings tool, which gives investors a comprehensive overview of an ETF’s top holdings and their characteristics.
Semiconductors are crucial for powering AI applications, and you’ll find plenty of leading semiconductor names here, like Nvidia, Taiwan’s Alchip Technologies, Advanced Micro Devices (
NASDAQ:AMD
), and Lattice Semiconductor (
NASDAQ:LSCC
).
Nvidia is a semiconductor leader when it comes to AI, with some sources estimating it has up to an 85% share of the GPU market, but don’t count out the likes of AMD, which Morgan Stanley (
NYSE:MS
) analyst Joseph Moore recently said could have an opportunity within AI that is multiple times larger than originally anticipated. Semiconductor fabrication companies like Taiwan Semiconductor (
NYSE:TSM
) and ASML Holding N.V. (
NASDAQ:ASML
) also have a place in the top 10 here, as AI wouldn’t be possible without these companies manufacturing the chips behind it for the likes of Nvidia and Advanced Micro Devices.
WTAI also holds the mega-cap tech names, like holding Meta Platforms (
NASDAQ:META
), and further down the list, Microsoft, Alphabet (
NASDAQ:GOOGL
), and Amazon (
NASDAQ:AMZN
), which are all making exciting advances in AI technology of their own. The portfolio also includes software companies like ServiceNow (
NYSE:NOW
) and UiPath (
NYSE:PATH
) that utilize AI within their offerings in order to help customers streamline and automate their workflows.
An additional thing you'll notice about WTAI's top holdings is that they have some very strong
Smart Scores. The Smart Score is TipRanks’ proprietary quantitative stock scoring system that evaluates stocks on eight different market factors. The result is data-driven and does not require any human intervention. A Smart Score of 8 or above is the equivalent of an Outperform rating.
Nvidia, C3.Ai (
NASDAQ:AI
), Lattice Semiconductor, Cadence Design Systems (
NASDAQ:CDNS
), and ASML lead the way with 'Perfect 10' Smart Scores. Meanwhile, AMD and Infineon Technologies (
XETRA:IFX
) also have Outperform-equivalent ratings, with Smart Scores of 8 and 9, respectively.
Is WTAI Stock a Buy, According to Analysts?
Analysts are also bullish on
WTAI stock, giving it a Moderate Buy rating. Of the 886 ratings on WTAI, 70.43% are Buys, 23.36% are Holds, and 6.21% are Sells.
The
average WTAI stock price target of $19.97 implies upside potential of 18.1% from current levels. The lowest price target, $15.90, is not too far below the ETF’s current price of $16.91, implying that while WTAI harbors solid upside potential, the downside could be limited from here.
Reasonable Expense Ratio
WTAI has a reasonable expense ratio of 0.45%. While this isn’t as cheap as one would expect from a low-cost, broad-market index fund, this is at least reasonable for a specialized, thematic ETF like this. While it's a bit higher than I would normally like to see, when
looking at a number of other popular AI-themed ETFs using TipRanks’ ETF comparison tool, WTAI has the lowest expense ratio of the bunch, narrowly edging out the
iShares Robotics and Artificial Intelligence Multisector ETF (
NYSEARCA:IRBO)
and coming in much lower than several other prominent names.
TipRanks users can use the comparison tool to easily compare up to 20 stocks or ETFs on a wide variety of customizable key criteria, such as price, Smart Scores, past performance, AUM, and much more.
A Strong Choice for Investing in the AI Megatrend
One risk that investors should be aware of is that at $13 million in AUM, WTAI is a very small ETF, which could make it more volatile than larger ETFs. However, it also has enough daily trading volume that liquidity shouldn’t be an issue for the average retail investor.
In summary, with a reasonable expense ratio (especially when compared to other AI-themed ETFs) and a well-diversified portfolio of holdings that encompasses all aspects of the AI space, WTAI looks like a strong choice for investors who want to gain exposure to this powerful long-term megatrend.
Disclosure
Note: The following is an excerpt from this week’s Earnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here>>>
Note: The following is an excerpt from this week’s Earnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here>>>
Uruguayan fintech Dlocal on Wednesday posted a 35% year-on-year jump in its first-quarter profit, landing at $35.5 million amid a strong boost in payments volumes.
There are hundreds or thousands of famous names for stock investors to choose from, but what if you could get immediate exposure to 500 top U.S. stocks? It's possible with the
SPDR S&P 500 ETF Trust (
NYSEARCA:SPY)
, and you can own this fund without paying hefty fees. I'm bullish on the SPY ETF because it has an excellent track record of providing returns to shareholders over the long term.
SPY stock is provided and managed by State Street (
NYSE:STT
), and it's designed to track (i.e., closely follow) the S&P 500 (
SPX
) index. It's been around since 1993, which makes SPY the first publicly-listed U.S. exchange-traded fund (ETF). Believe it or not, the SPY ETF represents over $380 billion worth of assets under management (AUM).
Of course, being the first and biggest doesn't necessarily make SPY the best U.S. ETF. So, let's see what else sets SPY apart from lesser entrants in the ETF space.
Instant Diversification is Easy with the SPY ETF
If you don't have the desire or the know-how to pick individual stocks, you can simply let the SPY ETF's fund managers do the legwork on your behalf. This fund provides immediate and convenient diversification for your portfolio, and SPY can be bought and sold within many types of investment accounts, including some retirement accounts.
Like the S&P 500 itself, the SPY ETF represents a basket of 500 companies across a broad range of market sectors, from information technology to health care, to consumer discretionary, financials, and more. Be aware, though, that not all of these categories are represented equally; this is a weighted index fund, meaning some sectors and companies have more influence than others do in the SPY ETF.
Notably, the information technology sector comprises around 26% of the weight of the SPY ETF. So, if you're going to buy and hold SPY, you'll definitely want to be bullish on technology names like Apple (
NASDAQ:AAPL
), which has a 7.14% weighting in SPY; Microsoft (
NASDAQ:MSFT
), which has a 6.25% weighting; and Amazon (
NASDAQ:AMZN
), which has a 2.68% weighting in the fund.
SPY is a Historical Winner with Low Fees
While having a mix of 500 stocks helps to reduce the volatility of the SPY ETF, there will still be ups and downs. Yet, if you check the
long-term chart of SPY, you'll find that historically, it has always recovered from its downturns (though we should bear in mind that past performance doesn't guarantee future results).
Also, the SPY ETF pays a
1.56% annual dividend yield, so that should enhance investors' returns over the long run. The dividend payments are issued on a quarterly basis, and some shareholders like to reinvest the dividends into more SPY shares in order to achieve a compounding effect.
Here's my favorite feature of the SPY ETF, though -- the rock-bottom fees. Believe it or not, SPY's annual gross expense ratio is just 0.09%. In other words, the SPY ETF's investors pay less than 1/10 of a percent per year for all of the fund managers' hard work and due diligence -- not a bad deal, wouldn't you agree?
Is SPY Stock a Buy, According to Analysts?
On TipRanks, SPY earns a Moderate Buy consensus rating based on the ratings of 6,168 analysts. 59% of ratings are Buys, while 35.51% are Holds and just 5.5% are Sells. The
average SPY stock price target of $469.96 implies 13.2% upside potential.
Conclusion: Should You Consider SPY ETF?
If you'd rather let someone else handle the business of picking large-cap U.S. stocks on your behalf, the SPY ETF is definitely worth considering. With SPY, you can get fast exposure to a broad range of well-known businesses.
Plus, investors can collect dividend payouts every quarter. So, as long as you don't mind giving extra weight to tech names in your portfolio, the SPY ETF is a great way to delve into the wide world of American stocks.
Disclosure
Looking at options trading activity among components of the Russell 3000 index, there is noteworthy activity today in Microsoft Corporation (Symbol: MSFT), where a total volume of 329,995 contracts has been traded thus far today, a contract volume which is representative of app