Despite initial fears surrounding tariffs and their effects on artificial intelligence stocks, the sell-off in early April hasn’t been an unraveling of the AI trade. Subsequent Q1 earnings reports have been largely favorable. This has eased anxious investors who are bullish on artificial intelligence.
Positive earnings reports from Microsoft, Meta, and Apple have been quieting the notion that tariffs could upend stocks that have been heavily reliant on AI to power its gains over the past few years. There were fears among AI execs and industry experts that tariffs could increase the cost of materials to build datacenters necessary to support AI technology.
“Few stocks are truly immune to Trump tariffs [and] trade war, but AI is a lot less impacted than investors currently believe," said Jed Ellerbroek Jr., portfolio manager at Argent Capital Management. "We’re early in a very steep growth curve right now, and that goes for AI infrastructure.”
Moreover, it’s difficult to deny the growth prospects of artificial intelligence whether or not tariffs make a tangible impact. Companies like Nvidia and Palantir could stand to benefit further as AI continues to grow it prominence in business and personal use.
Of course, these stocks could be benefiting from the tariff pause. If tariff news upends the markets once again, the same Magnificent Seven names could be susceptible to selling pressure. This is where having tactical exposure to leverage/inverse ETFs can benefit a trader and add to their toolbox.
Leveraging the AI Trade
Traders looking for a broad leveraged ETF to capitalize on further bullishness in AI can look at the Direxion Daily Robotics, Artificial Intelligence & Automation Index Bull 2X ETF (UBOT ). The fund seeks daily investment results that equal to 200% of the daily performance of the Indxx Global Robotics and Artificial Intelligence Thematic Index, allowing for all-encompassing artificial intelligence stock exposure.
Individual stocks, particularly those in the Magnificent Seven, will certainly be susceptible to AI news. For example, Apple’s foray into adding artificial intelligence search capabilities in its Safari browser sank shares of Google on fears it would grab market share. In turn, this could boost the Direxion Daily AAPL Bull 2X (AAPU ) as well as the the +Direxion Daily GOOGL Bear 1X Shares+ (GGLS ). Single-stock ETFs allow traders to be flexible in the markets, potentially profiting whether certain stocks head up or down.
Click here to see the full suite of single-stock ETFs from Direxion.
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