Artificial intelligence (AI) trade was a top performer in 2024, and forecasts predict elevated spending on the technology this year. One exchange-traded fund (ETF) that may benefit from this trend is the WisdomTree Artificial Intelligence and innovation Fund (WTAI). The ETF had an impressive showing in 2024, and experts believe it could be just the start of a massive AI spending cycle.
Historically, much of AI-related spending has focused on enablers like semiconductor companies. However, WTAI’s diverse holdings cover multiple AI bases, positioning it to benefit from increased expenditures. The ETF holds nearly 20 chip stocks, but its portfolio also includes software names that could benefit from the intersection of AI and cloud computing.
According to Fidelity, the benefits of AI adoption may shift from semiconductors and hardware toward software providers as generative AI moves past the infrastructure phase. This trend could mirror what happened during the development of the internet several decades ago. WTAI holds several cloud computing names that could capitalize on this shift, providing contextually relevant support for tasks like marketing, customer support, and back-office management.
The ETF’s diverse approach positions it to be a leader in AI spending, which is arguably a certainty. As AI continues to drive productivity gains and improve services like customer support, coding, graphic design, and translation, investors should keep an eye on stock valuations and the potential impact of further technological advances in the field.
Source: https://etfdb.com/model-portfolio-channel/ai-etf-wtai-favorable-2025-setup