BlackRock is the unquestionable 800-lb. Gorilla of the asset management universe. At $14 trillion AUM, BlackRock’s total assets are greater than the combined GDP of Russia, Japan, UK and Germany, and roughly 67% of the entire GDP of China.
As one might expect, BlackRock casts its shadow far and wide across the entire spectrum of financial instruments and products to have at least a minimum toehold in every conceivable asset class and industrial sector that might generate profits. Therefore, it comes as no surprise that it has a number of its talons in Artificial Intelligence. As the hottest sector in the market, R&D anticipation in A.I. has been the primary driver of the Magnificent 7 tech stocks, and the primary engine behind the S&P 500’s huge bull run over the past few years.
Although BlackRock has numerous direct investments in a wide range of A.I. companies both public and private, it does have a successful ETF that it offers to retail and institutional investors. The iShares Future AI & Technology ETF (NYSE: ARTY) sports a +91% 1-year gain as of the time of this writing. Increased attention towards both further R&D and widespread commercialization collaboration initiatives by major players in a wide range of sectors has many analysts convinced that the trend is real and will continue to expand. This fact hasn’t been lost on ARTY’s biggest rival,the Global X Artificial Intelligence & Technology ETF (NASDAQ: AIQ | AIQ Price Prediction), which has a considerably larger warchest, despite trailing ARTY’s performance.
iShares Future AI & Technology ETF
ARTY is issued by BlackRock’s iShares ETF division, and has BlackRock financial clout behind it.
ARTY is an ETF that uses the Morningstar Global Artificial Intelligence Select Index as its benchmark. ARTY’s portfolio holds A.I. stocks from around the world. ARTY does boast a superior 1-year return of +91.22% vs. AIQ’s +51.53%. It holds 50 different stocks and its inception date is June 26, 2018. Perhaps it’s due to BlackRock’s global reach, but the ARTY portfolio has a decidedly larger percentage of international company representation than AIQ.
|
Net Assets |
$2.81 billion |
52-week range |
$31.38-$62.20 |
|
Yield |
0.00% |
Expense Ratio |
0.47% |
|
YTD Return |
25.86% |
1-Year Return |
91.22% |
|
Avg. Daily Volume |
624,224 shares |
3-Year Return |
28.14% |
|
NAV |
$60.83 |
5-Year Return |
2.49% |
Top 10 holdings:
- Marvell Technology – 6.07%
- AMD – 5.99%
- Coreweave Inc. (Class A) – 5.51%
- Micron Technology, Inc.- 4.80%
- Taiwan Semiconductor – 4.43%
- Nvidia Corp. – 4.27%
- Broadcom Inc. – 4.39%
- Oracle Corp. – %3.89
- Naver Corp. – 3.66%
- Global Unichip Corp. – 3.27%
Global X Artificial Intelligence & Technology ETF
A.I. ETFs have made huge gain leaps, and AIQ is no exception.
Designed to track the Indxx Artificial Intelligence & Big Data Index for its benchmark, AIQ has the largest AUM warchest of the A.I. ETFs listed above. Launched on May 11,2018, AIQ owns 84 stocks in numerous subcategories related to A.I., such as software, semiconductors, communications services, and others. At the time of this writing, AIQ’s details include:
|
Net Assets |
$8.56 billion |
52-week range |
$35.99-$55.90 |
|
Yield |
0.20% |
Expense Ratio |
0.68% |
|
YTD Return |
8.22% |
1-Year Return |
51.53% |
|
Avg. Daily Volume |
1.97 million shares |
3-Year Return |
23.69% |
|
NAV |
$55.22 |
5-Year Return |
10.54% |
Top 10 holdings:
- Sy Hynix Inc. – 4.89%
- Samsung Electronics – 4.24%
- Intel Corp. – 4.20%
- AMD – 3.82%
- Micron Technology, Inc. – 3.75%
- Broadcom, Inc. – 3.58%
- Cisco Systems – 3.46%
- Taiwan Semiconductor – 3.46%
- Nvidia Corp., – 3.25%
- Amazon.com Corp. – 3.22%
A Pie Big Enough For Both
The A.I. pie is potentially so huge that both ARTY and AIQ will easily have enough for massive future growth.
The huge amounts of inflows going into AIQ and ARTY are a testament to the level of investor enthusiasm in the A.I. sector. However, growth rates like ARTY’s 91% or even AIQ’s 51% in a mere 12-month period would lead most people to think it’s an aberration.
Proliferation for A.I. data centers is on a significant clip, and their power and construction requirements are impacting a range of industries. For example:
- Nuclear Power – demands for leviathan-level amounts of reliable 24/7 power for data centers has revived interest in nuclear power. New developments in smaller, safer reactors that can generate standalone power without adding stress to the grid for cities is a big part of the attraction.
- Silver, Copper, and other commodities – the construction of AI data centers demands huge increases of copper, silver, and other raw materials in order to properly equip them to handle the tasks required for A.I. functions.
- Ancillary Industries – construction, maintenance, HVAC, and local environmental conservation management are all industries that are getting a boost from A.I. data center construction.
Both ARTY and AIQ are not only invested in the software and pure-play A.I. companies, but also in those with huge complementary businesses in which A.I. is a necessary component for the future Microsoft, Palantir, and a number of other companies are sinking so many billions into A.I. R&D that their cap-ex budgets are putting stress on their stock evaluations. Such is their unshakeable confidence in A.I.’s future benefits to their bottom lines and overall operations that they will take such a risk.
In retirspect, ARTY and AIQ might not be coming off an aberration, but rather the start of a technological renaissance.
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