When it comes to investing themes, none has captured the imagination of investors more than the artificial intelligence (AI) trend. In turn, the theme is also capturing a lot of investment capital. Given this trend, traders can certainly capitalize on the hype with leveraged ETFs.
One of the familiar names surrounding AI is certainly Nvidia. Given its focus on creating chips, it’s easy to see why it’s generating revenue at record numbers. Thus, it is appeasing its shareholders in return.
“Nvidia’s revenue and adjusted EPS soared 126% and 288%, respectively,” Motley Fool noted. “That acceleration was driven by its skyrocketing sales of data center GPUs for AI applications” and analysts are expecting “its revenue and adjusted EPS to grow 98% and 109%, respectively, in fiscal 2025.”
Apple will be one of the names to watch in AI. The iPhone maker’s recently announced the inclusion of AI technology in its iPhones. Its recent partnership with ChatGPT-maker OpenAI will allow iPhone users to tap into AI capabilities. This allows the company to keep up with other AI-focused peers like Microsoft and Google.
Trade the AI Trend
Nvidia and Apple are both names inherent in a pair of leveraged ETFs: the Direxion Daily AI and Big Data Bull 2X Shares (AIBU ) and the Direxion Daily AI and Big Data Bear 2X Shares (AIBD ). Both funds allow traders to get 200% exposure to the performance of the Solactive US AI & Big Data Index with AIBD getting the inverse of that exposure.
Designed by Solactive AG, the index represents the securities of companies domiciled in the United States that have business operations in the field of AI applications and big data. AIBU and AIBD offer an ideal broad-based solution. Both funds allow traders to play the upside or downside of AI, maintaining flexibility when it comes to extracting profits from the market.
“AIBU and AIBD seek to capitalize on the relationship between AI and big data. We’re launching these ETFs at a pivotal time. [AI and] its capabilities are now well established, but innovation is ongoing. Multiples for these companies are [high. And] sustaining valuations will be key,” noted Edward Egilinsky, Direxion managing director and head of sales and alternatives. “These ETFs offer traders a chance to express short-term convictions in the AI-big data sector.”
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