Apple and Nvidia appear to be in a proverbial dogfight for the top spot for the largest company based on market capitalization. Once again, the theme of artificial intelligence (AI) will play a major role in deciding the victor.
From a fundamental perspective, AI will be a prime tailwind for Nvidia. As global applications of AI increase, the need for processing power will require the use of chips that can meet this computing demand. This is where Nvidia has a major advantage.
“More companies are now embracing artificial intelligence in their everyday tasks and demand remains strong for Nvidia chips,” said Russ Mould, investment director at AJ Bell. “It is certainly in a sweet [spot. So] long as we avoid a big economic downturn in the United States, there is a feeling that companies will continue to invest heavily in AI capabilities, creating a healthy tailwind for Nvidia.”
Because of the AI theme, Nvidia’s stock has been surging to almost a 200% gain year to date. Traders who want to continue riding the momentum with double the exposure will want to take a look at the Direxion Daily NVDA Bull 2X Shares (NVDU ).
Apple’s primary tailwind will continue to be iPhone sales. But the company is also increasing its presence in the AI space. With the rollout of its AI platform, Apple Intelligence, now appearing in iPhone, consumers now have AI capabilities at their fingertips.
Should Apple continue to benefit from AI, traders can up the ante on their bullishness with the Direxion Daily AAPL Bull 2X (AAPU ).
Trade the Broad AI Theme
As mentioned, the commonality between NVDU and AAPU is AI, but some traders may not want that concentrated exposure. Thus, those who want more broad-based exposure to the AI theme can also choose the Direxion Daily Robotics, Artificial Intelligence & Automation Index Bull 2X ETF (UBOT ).
UBOT seeks daily investment results equal to 200% of the daily performance of the Indxx Global Robotics and Artificial Intelligence Thematic Index. The index provides exposure to exchange-listed companies in developed markets expected to benefit from adoption and use of robotics and/or AI.
For diversification, UBOT includes companies involved in developing industrial robots and production systems, automated inventory management, unmanned vehicles, voice/image/text recognition, and medical robots or robotic instruments. Nvidia was UBOT’s largest holding as of Sept. 30.
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