A leading ETF provider is betting that the artificial intelligence boom has only just begun.
Roundhill Investments launched the Generative AI & Technology ETF (CHAT) less than 20 days ago. It is the first-ever exchange-traded fund designed to track companies involved in generative AI and other related technologies.
“These companies, we believe, aren’t just a fad. They’re fueling something that could be as ubiquitous as the internet itself,” the company’s chief strategy officer, Dave Mazza, told “ETF Edge” this week. “We’re not talking about hopes and dreams (or) a theme or a fad that might happen 30 years from now that might change the world.”
Mazza notes that the fund doesn’t just include pure AI companies like C3.ai but also large-cap technology companies such as Microsoft and AI chipmaker Nvidia.
Nvidia is the fund’s top stake at 8%, according to the company’s website. Its shares are up nearly 42% in the past two months. Year-to-date, Nvidia stock has jumped 169%.
“This (AI) is an area that’s going to get a lot of attention,” Mazza said.
His bullish forecast comes as the AI is a price bubble that will burst and wipe out the Big Tech rally.
In a recent interview on CNBC’s “Fast Money,” Dan Suzuki of Richard Bernstein Advisors — a Big Tech bear since June 2021 — compared the AI rally to the dotcom bubble of the late 1990s.
“People are jumping from one story to another,” the company’s deputy chief investment officer said Wednesday. “I love the technology. I think the applications will be huge. That doesn’t mean it’s a good investment.”
The CHAT ETF is up more than 8% since it began trading on May 18.