Five artificial intelligence investments to buy offer the possibility of powerful upside from four technology funds and one industry giant.
The five artificial intelligence investments to buy have been climbing as technology stocks rebound from a 30%-plus plunge in 2022. Investors who can tolerate volatility may want to tap these technology equities in pursuit of potentially potent gains.
Bear in mind that governments may start to regulate artificial intelligence and affect the independence of companies to do whatever their managements teams may want. Technology entrepreneur Elon Musk, owner and CEO of Twitter, Inc. (NYSE: TWTR), Tesla Inc. (NASDAQ: TSLA) and privately held SpaceX, said on a recent podcast with presidential candidate Robert F. Kennedy Jr. that China is planning to initiate the regulation of artificial intelligence.
Despite headwinds of inflation, the Fed’s tight money policies and a brewing banking crisis after several recent financial institution failures, the technology-tilted NASDAQ Composite has soared about 25.73% year to date, as of June 6. Investors who are reluctant to purchase artificial intelligence stocks may prefer using a fund consisting of many equities to reduce risk.
Woods Weighs Intrepidly in on One of Five Artificial Intelligence Investments to Buy
The TrueShares Technology, AI & Deep Learning ETF (LRNZ) is the easiest way to gain a broad allocation to some of the best stocks in the AI space, said Jim Woods, who heads the Intelligence Report investment newsletter and the Bullseye Stock Trader advisory service that features both stock and option recommendations. As an actively managed exchange-traded fund, LRNZ centers its portfolio of global stocks focused on the development and use of AI and deep learning technologies. The fund holds 20-30 mostly large-cap stocks at a time, all of which either derive at least half of their revenue from AI, or have a competitive advantage in the technology.
“When a tech wave like this is roaring into shore, it behooves investors to jump on it early, and LRNZ is the way to do it,” Woods told me.
Paul Dykewicz meets with Jim Woods, head of Bullseye Stock Trader.
AI technology is receiving much buzz, with investment interest in the category gaining momentum. LRNZ holdings fit into one of three categories. The first is secular growth, consisting of stocks the fund managers use as a buy-and-hold strategy. This category is expected to have the greatest number of holdings. The second category, cyclical growth businesses, identifies shares that ideally can be bought at the bottom of a cycle and sold at their peak. Finally, there are initial public offering (IPO) positions, which are built over several months after a company goes public.
LRNZ contains primarily U.S. stocks, which consist of more than 99% of its holdings. Roughly 72% of its assets are in technology services, with additional smaller holdings in electronics, health technology and retail trade. Top current holdings include NVIDIA Corp (NASDAQ: NDVA), Advanced Micro Devices, Inc. (NASDAQ: AMD), Snowflake, Inc. (NYSE: SNOW), Schrodinger, Inc. (NASDAQ: SDGR), Mobileye Global, Inc. (NASDAQ: MBLY), SentinelOne, Inc. (NYSE: S) and Samsara, Inc. (NYSE: IOT).
Chart courtesy of StockCharts.com.
By the market’s close on June 5, LRNZ had jumped 24.85% in the last month, 16.12% in the past three months and an impressive 38.73% year to date (YTD). The fund also has a current expense ratio of 0.69%.
Woods has amassed a quick track record of success in recommending profitable stock and option trades in artificial intelligence companies. For example, Woods recently reaped rewards from the rapid rise of C3.ai Inc. (NYSE: AI) and Rambus Inc. (NASDAQ: RMBS). He produced a 167.20% gain on AI July 21 $25 call options in just 31 days. Woods also achieved an 83.10% profit in RMBS Aug. 18 $50 call options in only 13 days. Both recommendations came in his High Velocity Options trading service. That service only recommends options aimed at producing quick profits.
XLK Rates as One of Five Artificial Intelligence Investments to Buy
An advocate of technology funds and stocks in 2023 is Mark Skousen, PhD, an economist who serves as a Presidential Fellow at Chapman University and heads the Forecasts & Strategies investment newsletter. Skousen, who is a descendant of founding father, diplomat and inventor Benjamin Franklin, also is a seasoned forecaster who recommended Technology Select Sector SPDR Fund (NYSE: XLK), in Forecasts & Strategies. That fund has jumped 33.64% so far this year through June 5.
Mark Skousen, head of Forecasts & Strategies, meets with Paul Dykewicz.
Professor Picks One of Five Artificial Intelligence Investments to Buy
Technology Select Sector SPDR Fund offers a current dividend yield of 0.8%. Skousen shared its secret: the fund’s holdings are heavily weighted toward some of the most successful technology so far in 2023: Microsoft (NASDAQ: MSFT), climbing 39.70%; Apple (NASDAQ: AAPL), soaring 38.57%; NVIDIA (NASDAQ: NVDA), zooming 168.06%; Broadcom (NASDAQ: AVGO), gaining 42.11%; and Salesforce (NASDAQ: CRM), up 58.28%.
Skousen, who also heads the TNT Trader advisory service that recommends both stocks and options, instructed his followers to take a profit on May 25 of 323.96% by selling call options in Nvidia Corp. that he recommended on May 2. The stock rose 34% in just a few months during the time Skousen recommended it, while the options sold in parts at varying levels to produce an average gain during the same time of 196%.
PSJ Picked Among Five Artificial Intelligence Investments to Buy
A third way to gain exposure in artificial intelligence is through Invesco Dynamic Software (PSJ), a fund aimed at tracking the Dynamic Software Intellidex Index. PSJ consists of approximately 30 companies engaged in businesses related to software applications, systems and information services, said Bob Carlson, a pension fund chairman who heads the Retirement Watch investment newsletter.
Bob Carlson, head of Retirement Watch, meets with Paul Dykewicz.
The index is updated quarterly to incorporate factors such as price momentum, earnings momentum, quality, management action and value. The fund’s turnover ratio is more than 200%, Carlson counseled.
About 49% of the fund is in its 10 largest positions. Top holdings recently were Electronic Arts (NASDAQ: EA), Forinet (NASDAQ: FTNT), Activision Blizzard (NASDAQ: AITI), Cadence Design Systems (NASDAQ: CDNS) and The Trade Desk (NASDAQ: TTD).
PSJ lost 27.73% in 2022 but is up 15.52% so far in 2023, 5.27% in the last 12 months, 8.05% in the past three months and 10.41% in last one month. The fund also offers a modest dividend yield of 2.0%.
Chart courtesy of www.stockcharts.com
TDIV Tapped as One of Five Artificial Intelligence Investments to Buy
A broader-based fund with a decent dividend yield is First Trust NASDAQ Technology Dividend Index (TDIV). The ETF tries to track the Nasdaq Technology Dividend Index, which is composed of technology and telecommunications companies.
The fund recently had 94 holdings, and its 10 largest positions accounted for 59% of its assets. The biggest weightings recently were Microsoft (NASDAQ:MSFT), Apple (NASDAQ: AAPL), Intel (NASDAQ: INTC), Broadcom (NASDAQ: AGVO) and IBM (NYSE: IBM). Roughly 13% of the fund is invested in communication services, while the rest fit into the technology sector.
The fund lost 22.12% in 2022 but is up 16.66% so far in 2023, 8.64% during the past three months and 2.831% in the last 12 months. The stock’s dividend yield hovers near 2.2%.
Chart courtesy of www.stockcharts.com
Five Artificial Intelligence Investments to Buy Include MSFT
Microsoft (NASDAQ: MSFT), is a dividend-paying software development company in Redmond, Washington, that is engaged in artificial intelligence and has leaped nearly 40% so far this year. The company reported better-than-expected results for its fiscal third quarter, especially in its Microsoft Cloud business, according to Chicago-based investment firm William Blair & Co. Third-quarter revenue for Microsoft finished $1.8 billion ahead of consensus estimates.
The company’s fiscal fourth quarter revenue guidance came in at roughly $640 million ahead of consensus estimates, after adjusting for currency headwinds, according to William Blair. Income investors may appreciate that Microsoft pays a current dividend of 0.82%.
Even though Microsoft Azure — a cloud platform of more than 200 products and cloud services — is expected to continue decelerating to mid-20% growth in the fourth quarter, demand for AI infrastructure is already proving to be a growth tailwind. The company’s Azure results and outlook have been aided by AI, William Blair wrote in a recent research note.
“Azure growth of 31% was one percentage point ahead of guidance,” according to William Blair. “Nonetheless, this represented a deceleration from second-quarter growth of 38% as a result of continued pressure from customers looking to reduce consumption and optimize costs. Despite increased scrutiny on spending and lower cloud consumption related to weaker macro activity — conditions expected to persist in the near term — Microsoft is starting to see robust momentum for its OpenAI Azure Services offering, which grew to 2,500 customers in the third quarter (10 times growth quarter-over-quarter).”
Chart courtesy of www.stockcharts.com
Connell Predicts Any Stoppage of Fed Rate Hikes Will Aid Growth
“When the Federal Reserve stops ratcheting up interest rates, I would expect strong growth stories to continue to profit,” said Michelle Connell, who heads the Dallas-based Portia Capital Management.
Michelle Connell heads Portia Capital Management.
Investors are flocking into AI funds and stocks but Connell cautioned to avoid overpaying at potentially inflated valuations. To protect against such missteps, investors should consider dollar-cost averaging and buying shares amid pullbacks, Connell counseled.
Damage of Dam in Ukraine Creates New Crisis
Russia’s invasion of Ukraine led to a new crisis on June 6 due to damage at the Kakhovka Hydroelectric Power Plant dam, forcing emergency evacuations to sections of the country’s southern region of Kherson. Ukraine President Volodymyr Zelenskyy and other officials posted photos and videos showing a massive surge of water flowing from the damaged structure to put thousands of residents downstream at risk. Ukrainian leaders blame damage to the dam on Russia. However, Russia is accusing Ukrainians of sabotaging the dam.
In addition, during a 24-hour period stretching into Friday, June 2, Ukrainian military officials said Russia had carried out 62 missile strikes and 15 air strikes. In defense of its own land, Ukraine rebuffed more than a dozen ground assaults, those officials added.
Despite Russia’s sustained attacks against Ukraine using a combination of drones and missiles, at least a couple of buildings in Moscow were struck by drones on the morning of May 30 to mark the first such incursion on Russia’s capital since President Vladimir Putin ordered troops to invade its much smaller neighbor in February 2022. Despite Putin calling Russia’s attack against Ukraine a “special military operation,” the United Nations has reported that its investigations of the invasion have found evidence of “war crimes.”
The five artificial intelligence investments to buy present investors with a prime opportunity to profit.
Paul Dykewicz, www.pauldykewicz.com, is an accomplished, award-winning journalist who has written for Dow Jones, the Wall Street Journal, Investor’s Business Daily, USA Today, the Journal omf Commerce, Crain Communications, Seeking Alpha, Guru Focus and other publications and websites. Paul can be followed on Twitter @PaulDykewicz, and is the editor and a columnist at StockInvestor.com and DividendInvestor.com. He also serves as editorial director of Eagle Financial Publications in Washington, D.C. In that role, he edits monthly investment newsletters, time-sensitive trading alerts, free weekly e-letters and other reports. Previously, Paul served as business editor and a columnist at Baltimore’s Daily Record newspaper and as a reporter at the Baltimore Business Journal. Plus, Paul is the author of an inspirational book, “Holy Smokes! Golden Guidance from Notre Dame’s Championship Chaplain,” with a foreword by former national championship-winning football coach Lou Holtz. The uplifting book is endorsed by Joe Montana, Joe Theismann, Ara Parseghian, “Rocket” Ismail, Reggie Brooks, Dick Vitale and many other sports figures. To buy signed and specially dedicated copies, call 202-677-4457.