A major ETF provider is betting that the artificial intelligence boom is just beginning.
Roundhill Investments launched the Generative AI & Technology ETF (CHAT) less than 20 days ago. It is the first exchange-traded fund aimed at tracking companies engaged in generative AI and other related technologies.
“We believe these companies aren’t just a fad. They’re powering something that could be as ubiquitous as the internet itself,” Dave Mazza, the company’s chief strategy officer, told ETF Edge this week. “We don’t talk about hopes and dreams [or] a topic or fad that could happen in 30 years and change the world.
Mazza points out that the fund does not only include pure AI companies C3.ai but also large-cap tech companies like Microsoft and AI chip manufacturers Nvidia.
According to the company’s website, Nvidia is the fund’s largest holding at 8%. Its shares are up nearly 42% over the past two months. Year-to-date, Nvidia stock is up 169%.
“The [AI] is an area that will receive a lot of attention,” said Mazza.
His optimistic forecast is based on fears that AI is a price bubble that could burst and wipe out the big tech rally.
In a recent interview on CNBC’s Fast Money, Richard Bernstein Advisors’ Dan Suzuki — a big-tech bear since June 2021 — compared the AI rally to the dot-com bubble of the late 1990s.
“People jump from narrative to narrative,” 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 the start of trading on May 18.
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