There’s no denying that the artificial intelligence (AI) trade has provided momentum to ETFs such as the Invesco QQQ Trust (QQQ ) and the Invesco NASDAQ 100 ETF (QQQM ). Meanwhile, investors have pondered the extent of AI’s transformative nature and how much adopters are going to dole out in the AI arms race.
The ongoing evolution of generative AI, currently the most advanced and readily accessible form of the technology, has been undeniably potent for QQQ/QQQM investors. Over the past two years, those ETFs topped the S&P 500 by nearly 1,000 basis points. Some of the bullishness is attributable to enthusiasm for comparing AI to other, now old disruptive technologies.
“Just as electrification and the internet created general-purpose platforms that lifted output and lowered costs, AI is widely seen as the next productivity revolution, evoking memories of the revival in productivity after the dot-com boom in the late 1990s,” according to Charles Schwab research.
QQQ Has AI Investing Advantages
Many investors can easily name some of the marquee AI stocks, including Nvidia (NVDA) and Broadcom (AVGO), but that doesn’t mean AI stock-picking is easy. That’s where QQQ and QQQM come in. The ETFs ease the AI stock selection challenge, while providing exposure to a plethora of AI-related equities. That’s good news for capital-constrained investors who want broader exposure.
“Chipmakers such as NVIDIA, AMD, and Broadcom have become central beneficiaries of demand for graphics processing units (GPUs) and specialized chips. Cloud providers like Microsoft, Amazon, and Google are spending tens of billions of dollars annually in AI capacity by embedding it into their ecosystems and creating subscription-based revenue stream,” added Schwab.
All six of the stocks mentioned above are QQQ/QQQM holdings, and major ones at that. On a related note, the Invesco ETFs hold each of the Magnificent Seven names. That makes the funds efficient vehicles for advisors and investors looking to check all seven boxes under a single umbrella.
To be sure, some market participants have expressed concerns about generative AI’s limitations. That has prompted speculation about what’s next in AI and if that evolution will be as rewarding for investors as the early stages have been. Thanks to newer concepts, including Artificial General Intelligence (AGI), it’s possible QQQ/QQQM holdings will continue delivering AI-charged upside for investors.
“Unlike today’s AI systems, which are typically narrow (specialized in specific tasks), AGI has the ability to understand, learn, and apply knowledge across diverse domains without being explicitly programmed for each one. AGI is expected to bring significant expansions in productivity and wealth creation,” concluded Schwab.
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