Below is Validea's daily guru fundamental report for ADVANCED MICRO DEVICES, INC. (AMD). Of the twelve guru strategies we follow, AMD rates highest using our Value Investor model based on the published strategy of Benjamin Graham. This deep value methodology screens for stocks t
The U.S. equity markets witnessed tough times in early 2023. But this may soon change as the Federal Reserve chairman expects inflation to ease in 2023.
The semiconductor space has been surging over the past three months on improving demand from chips suppliers, data centers, PC manufacturers, and mobile phone producers, as well as reopening in China. However, mixed quarterly results from well-known players slowed down th
Let's say you have $50,000 to invest. How should you do it? Here at The Motley Fool, we recommend spreading your risk by investing in at least 25 stocks across various sectors.
Bear markets are never easy to navigate, but history makes one thing clear: They can be the best time to buy stocks for the long term. The Nasdaq-100 technology index plunged by 33% in 2022, and we saw far steeper declines in many individual stocks. While nobody knows for sure wh
Artificial intelligence, -- specifically,
ChatGPT -- has captured the imagination of investors and the general public in a way that no new technological innovation has since the launch of the iPhone. The AI-powered chatbot was only released on November 30th, 2022, but it's already shaking up business models and reshaping entire industries.
For instance, shares of beleaguered Buzzfeed (
NASDAQ:BZFD
)
soared on the mere mention that the company would use tools from ChatGPT parent company OpenAI to generate content.
Meanwhile, Microsoft (
NASDAQ:MSFT
) announcing that its Bing search engine will incorporate answers from ChatGPT gave it a new weapon in its quest to chip away at Alphabet's (
NASDAQ:GOOGL
) longtime dominance in search. Impressively, ChatGPT has already passed the bar exam, and schools are scrambling to prevent students from using ChatGPT to complete essay assignments.
Many investors are understandably eager to invest in this type of game-changing technology. Unfortunately, ChatGPT creator OpenAI is off-limits to the average investor because it is a private company. However, companies like Alphabet and Baidu (
NASDAQ:BIDU
) are developing their own consumer-facing AI offerings, and Tesla (
NASDAQ:TSLA
) is pioneering self-driving cars while semiconductor companies are providing the computing power that powers the space.
Rather than picking individual winners and losers, investors can gain broad-based exposure to the theme of artificial intelligence with ETFs. Here are two of the best ETFs for gaining exposure to the growth of artificial intelligence, like ChatGPT.
1. ARK Autonomous Technology and Robotics ETF (
ARKQ)
Cathie Wood’s ARK Invest is no stranger to disruptive technologies like artificial intelligence. The ARK Autonomous Technology and Robotics ETF is an ETF that specifically focuses on the space.
Regarding
ARKQ's top holdings, Tesla, which utilizes AI in autonomous driving, comes in at number one (14.2% weighting). UiPath (
NYSE:PATH
), known for using AI to create automated workflows, is also a top holding (6.9% weighting).
Additionally, investors may be surprised to see names like Deere (
NYSE:DE
) in this fund because Deere is more associated with tractors than technology. However, it’s important to remember that Deere is incorporating AI into its agricultural equipment. Deere has been investing in AI and robotics for years and now has fully-autonomous tractors.
Another holding, Kratos Defense (
NASDAQ:KTOS
) (7.1% weighting), is a defense contractor that makes unmanned systems.
The fund is fairly concentrated, with just 38 holdings. The top 10 positions make up 64% of the total fund. ARKQ ETF has $949 million in assets under management. It has a neutral Smart Score of 7, and the consensus is that ARKQ is a Hold. The average price target for ARKQ stock is $58.38, which is a 18.5% premium from current levels.
ARKQ posted a phenomenal return of 106.7% in 2020 and tacked on another 2.7% in 2021. However, the ETF fell 46.7% in 2022 as investor sentiment towards the technology sector soured thanks to rising inflation and higher interest rates. Perhaps unsurprisingly, thanks to the surge in investor interest in artificial intelligence, ARKQ is up nearly 22% year-to-date.
Overall, ARKQ looks like a useful tool for investors interested in gaining broad-based exposure to artificial intelligence as a whole, whether it's a quintessential tech stock like UiPath or an ag-tech company incorporating AI into its products like Deere.
2. VanEck Semiconductor ETF (
NASDAQ:SMH)
My other pick for exposure to ChatGPT isn’t an artificial intelligence ETF but rather the VanEck Semiconductor ETF. Why? Because semiconductors are the picks and shovels that will power the AI revolution, and this ETF gives you exposure to the industry. All three of
SMH's top holdings have significant AI exposure.
Taiwan Semiconductor (
NYSE:TSM
) is the fund’s largest holding, having an 11.57% weighting. Taiwan Semiconductor makes the world’s smallest and most advanced chips. These chips are crucial to semiconductor companies that serve the AI market, such as Nvidia (
NASDAQ:NVDA
) and Advanced Micro Devices (
NASDAQ:AMD
), which are the fund’s second and third-largest holdings.
Nvidia is making its own language learning models (like the ones that ChatGPT was trained on) and collaborating with Microsoft on a supercomputer to handle AI workloads.
Also, AMD is in the middle of developing several AI projects of its own. SMH even incorporates stocks like Lam Research (
NASDAQ:LRCX
) and ASML Holdings (
NASDAQ:ASML
). These companies provide and service the high-end equipment that semiconductor makers need to make chips.
Like ARKQ, the Van Eck Semiconductor ETF is relatively concentrated, holding just 26 positions. The top two holdings, Taiwan Semiconductor and Nvidia, make up about 22% of the fund. The top 10 positions account for 59.4% of the fund's assets.
SMH is a large ETF with $7.7 billion in assets under management. SMH has a Smart Score of 8, giving it an outperform rating. Further, the consensus is that SMH is a Moderate Buy, and the average SMH stock price target of $267.16 indicates 7.9% upside potential from here. Lastly, blogger sentiment is bullish, and the hedge fund trend is positive.
The VanEck Semiconductor ETF posted an impressive 55% gain in 2020 and followed it up with a 42% gain in 2021. However, it plummeted 33% in 2022 as investors worried about an oversupply of semiconductors and a slowing economy. Like ARKQ, SMH has rebounded strongly so far in 2023, with a 23% year-to-date gain.
The Takeaway
After a challenging 2022 for tech stocks, excitement over generative AI has breathed new life into the tech sector. The pace at which technologies like ChatGPT have hit critical mass has been incredible. The ARK Autonomous Technology & Robotics ETF is a great way to gain exposure to artificial intelligence in all its forms. This includes both self-driving cars like Tesla and companies that are incorporating AI into AgTech like Deere.
The VanEck Semiconductor ETF is not strictly focused on AI, but semiconductors are the fuel that will feed the AI fire. SMH stock is a great way to get exposure to the space. The top three holdings, Taiwan Semiconductor, Nvidia, and Advanced Micro Devices, will all be crucial to the growth of AI.
Taking all this in, both ETFs look like sensible ways to gain exposure to the new technological age that ChatGPT is ushering in.
Disclosure
Artificial intelligence, -- specifically,
ChatGPT -- has captured the imagination of investors and the general public in a way that no new technological innovation has since the launch of the iPhone. The AI-powered chatbot was only released on November 30th, 2022, but it's already shaking up business models and reshaping entire industries.
For instance, shares of beleaguered Buzzfeed (
NASDAQ:BZFD
)
soared on the mere mention that the company would use tools from ChatGPT parent company OpenAI to generate content.
Meanwhile, Microsoft (
NASDAQ:MSFT
) announcing that its Bing search engine will incorporate answers from ChatGPT gave it a new weapon in its quest to chip away at Alphabet's (
NASDAQ:GOOGL
) longtime dominance in search. Impressively, ChatGPT has already passed the bar exam, and schools are scrambling to prevent students from using ChatGPT to complete essay assignments.
Many investors are understandably eager to invest in this type of game-changing technology. Unfortunately, ChatGPT creator OpenAI is off-limits to the average investor because it is a private company. However, companies like Alphabet and Baidu (
NASDAQ:BIDU
) are developing their own consumer-facing AI offerings, and Tesla (
NASDAQ:TSLA
) is pioneering self-driving cars while semiconductor companies are providing the computing power that powers the space.
Rather than picking individual winners and losers, investors can gain broad-based exposure to the theme of artificial intelligence with ETFs. Here are two of the best ETFs for gaining exposure to the growth of artificial intelligence, like ChatGPT.
1. ARK Autonomous Technology and Robotics ETF (
ARKQ)
Cathie Wood’s ARK Invest is no stranger to disruptive technologies like artificial intelligence. The ARK Autonomous Technology and Robotics ETF is an ETF that specifically focuses on the space.
Regarding
ARKQ's top holdings, Tesla, which utilizes AI in autonomous driving, comes in at number one (14.2% weighting). UiPath (
NYSE:PATH
), known for using AI to create automated workflows, is also a top holding (6.9% weighting).
Additionally, investors may be surprised to see names like Deere (
NYSE:DE
) in this fund because Deere is more associated with tractors than technology. However, it’s important to remember that Deere is incorporating AI into its agricultural equipment. Deere has been investing in AI and robotics for years and now has fully-autonomous tractors.
Another holding, Kratos Defense (
NASDAQ:KTOS
) (7.1% weighting), is a defense contractor that makes unmanned systems.
The fund is fairly concentrated, with just 38 holdings. The top 10 positions make up 64% of the total fund. ARKQ ETF has $949 million in assets under management. It has a neutral Smart Score of 7, and the consensus is that ARKQ is a Hold. The average price target for ARKQ stock is $58.38, which is a 18.5% premium from current levels.
ARKQ posted a phenomenal return of 106.7% in 2020 and tacked on another 2.7% in 2021. However, the ETF fell 46.7% in 2022 as investor sentiment towards the technology sector soured thanks to rising inflation and higher interest rates. Perhaps unsurprisingly, thanks to the surge in investor interest in artificial intelligence, ARKQ is up nearly 22% year-to-date.
Overall, ARKQ looks like a useful tool for investors interested in gaining broad-based exposure to artificial intelligence as a whole, whether it's a quintessential tech stock like UiPath or an ag-tech company incorporating AI into its products like Deere.
2. VanEck Semiconductor ETF (
NASDAQ:SMH)
My other pick for exposure to ChatGPT isn’t an artificial intelligence ETF but rather the VanEck Semiconductor ETF. Why? Because semiconductors are the picks and shovels that will power the AI revolution, and this ETF gives you exposure to the industry. All three of
SMH's top holdings have significant AI exposure.
Taiwan Semiconductor (
NYSE:TSM
) is the fund’s largest holding, having an 11.57% weighting. Taiwan Semiconductor makes the world’s smallest and most advanced chips. These chips are crucial to semiconductor companies that serve the AI market, such as Nvidia (
NASDAQ:NVDA
) and Advanced Micro Devices (
NASDAQ:AMD
), which are the fund’s second and third-largest holdings.
Nvidia is making its own language learning models (like the ones that ChatGPT was trained on) and collaborating with Microsoft on a supercomputer to handle AI workloads.
Also, AMD is in the middle of developing several AI projects of its own. SMH even incorporates stocks like Lam Research (
NASDAQ:LRCX
) and ASML Holdings (
NASDAQ:ASML
). These companies provide and service the high-end equipment that semiconductor makers need to make chips.
Like ARKQ, the Van Eck Semiconductor ETF is relatively concentrated, holding just 26 positions. The top two holdings, Taiwan Semiconductor and Nvidia, make up about 22% of the fund. The top 10 positions account for 59.4% of the fund's assets.
SMH is a large ETF with $7.7 billion in assets under management. SMH has a Smart Score of 8, giving it an outperform rating. Further, the consensus is that SMH is a Moderate Buy, and the average SMH stock price target of $267.16 indicates 7.9% upside potential from here. Lastly, blogger sentiment is bullish, and the hedge fund trend is positive.
The VanEck Semiconductor ETF posted an impressive 55% gain in 2020 and followed it up with a 42% gain in 2021. However, it plummeted 33% in 2022 as investors worried about an oversupply of semiconductors and a slowing economy. Like ARKQ, SMH has rebounded strongly so far in 2023, with a 23% year-to-date gain.
The Takeaway
After a challenging 2022 for tech stocks, excitement over generative AI has breathed new life into the tech sector. The pace at which technologies like ChatGPT have hit critical mass has been incredible. The ARK Autonomous Technology & Robotics ETF is a great way to gain exposure to artificial intelligence in all its forms. This includes both self-driving cars like Tesla and companies that are incorporating AI into AgTech like Deere.
The VanEck Semiconductor ETF is not strictly focused on AI, but semiconductors are the fuel that will feed the AI fire. SMH stock is a great way to get exposure to the space. The top three holdings, Taiwan Semiconductor, Nvidia, and Advanced Micro Devices, will all be crucial to the growth of AI.
Taking all this in, both ETFs look like sensible ways to gain exposure to the new technological age that ChatGPT is ushering in.
Disclosure
The NASDAQ 100 After Hours Indicator is down -.5 to 12,501.81. The total After hours volume is currently 96,043,499 shares traded.The following are the most active stocks for the after hours session: Palantir Technologies Inc. (PLTR) is +1.5 at $9.11, with 13,709,591 shares trad
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