Is the AI-focused Exchange-Traded Fund (ETF) the brightest on a global scale?
The Xtrackers Artificial Intelligence & Big Data ETF (XAIX) is making waves in the investment world, with a diverse portfolio of 87 stocks that include tech giants like Nvidia, Microsoft, and Amazon, as well as lesser-known companies such as the Chinese video and photo app Meitu and the South Korean WhatsApp competitor Kakao.
The ETF is structured around themes like Deep Learning, image and speech recognition, chatbots, cloud computing, cybersecurity, and big data. One of the standout stocks in the ETF is Oracle, accounting for approximately 5.14% of the fund. Other top holdings include NVIDIA (around 4.99%), Alphabet (4.82%), Microsoft (4.75%), and Amazon.com (4.73%), with the top 10 holdings accounting for roughly 46.23% of the fund.
According to TipRanks analyst consensus, the XAIX ETF has a potential upside of approximately 10.47%, with an average target price of $42.76 compared to its current trading price of $38.71. Some underlying holdings like Ambarella, Itron, and Kingsoft Cloud Holdings also show significant growth potential based on analyst targets.
Ambarella, in particular, has demonstrated strong recent financial performance, with a 57.6% year-over-year revenue increase and record AI revenue, highlighting growth drivers within the ETF’s portfolio.
The ETF's focus on cutting-edge technologies is not limited to the stock market. The ING Bank in the Netherlands, for instance, is currently using generative AI to improve customer service, with the new AI version of their chatbot increasing the satisfaction rate of customer inquiries by 20 percent.
The importance of cybersecurity has significantly increased due to the rise in data breaches and cyber attacks. Advanced biometric methods like facial recognition offer secure authentication methods, while automated cybersecurity systems recognize and respond to security threats faster.
Moreover, image recognition systems are being used in various fields, from optimizing medical diagnostics and quality control to diagnosing skin cancer and improving disease prevention. They are also being used in retail for understanding customer preferences and developing marketing strategies.
Perhaps one of the most exciting developments is the expected replacement of traditional call centers by intelligent NLP chatbots that understand complex queries. These chatbots are expected to reach 37 million customers when rolled out in ten markets.
This article first appeared in the new print edition of BÖRSE ONLINE. For more information, you can find the full article here.
The XAIX ETF, with its focus on artificial-intelligence and technology, includes stocks like Ambarella, which demonstrated strong financial performance and significant AI revenue growth. Additionally, the use of artificial-intelligence is not just limited to stocks, as seen in the use of generative AI by ING Bank for improved customer service.
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