AI trading continues to drive market growth and shows few signs of slowing. Sylvia Jablonski, CEO and CIO of Defiance ETFs, appears on Wealth! to offer insights on navigating the markets in these AI-driven times.
Jablonski notes that investors are now associating AI with the tech giants known as the “Magnificent 7.” Given this trend, he recommends semiconductor or large-cap ETFs as a way to gain exposure to these sectors. He also emphasizes the importance of considering ETFs that offer exposure to core AI stocks, as well as companies involved in AI infrastructure, staples and hardware.
The Defiance ETF CEO predicts that in the long term, AI will benefit multiple sectors, from healthcare to self-driving cars. “I think we’re still in the early stages, because AI is going to impact just about everything. In the early stages, you’re asking, what are the hottest stocks? And people are buying them,” she said. But she foresees a second phase in which the market’s focus will shift to companies that are essential to AI operations.
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Video Transcript
Wall Street is abuzz with NVIDIA’s emergence as the most valuable public company.
However, with all the talk about the impact of AI, it’s easy to forget that AI technology is currently still in its infancy.
And as investment opportunities start to take shape more broadly, AI ETFs are one way to get a foot in the door into the AI market. In this week’s ETF Report brought to you by QQQ Sylvia, we’re joined by Sylvia Jablonski, CEO and CIO of Defiance ETFs, to help explain.
Nice to meet you.
Thank you for coming to our studio.
Thank you for inviting me.
got it.
So now many are looking at the best ways to leverage AI, or ETFs.
Where do you point first?
Well, I think AI is definitely number seven right now.
The ones everyone is most familiar with are the Microsoft Chat GP T phenomenon, NVIDIA, AMD, and others.
So if you want access to the semiconductor side, you can look at a pure semiconductor ETF, NVIDIA is an ad, etc. You can also look at a simple cue, large cap tech ETF, because those ETFs have the top names in them, Magna Seven, Fab Five, names you like.
Well, you can also consider a more broad type of niche product.
For example, we run a quantum ETF where we look at the AI side, the machine learning side, the supercomputing side.
So you’re not just getting AI, you’re getting the fundamental building blocks that go into AI: conductivity, communication, hardware, software, and so on.
So, if you’re looking for investments beyond individual stocks, a thematic ETF would be a classic tech trade, or a semiconductor ETF.
Is there a way to roughly separate NVIDIA’s customer base that’s buying chips from the business-to-business side of artificial intelligence that’s doing the buying?
And on the other hand, there are players creating applications that consumers actually interact with.
Yeah.
When we built the ETF, we thought about it that way because we thought they were both consumers and providers of essential goods.
But the challenge, as you say, is that every sector out there is going to be consuming AI and consuming chips, right?
So I think healthcare will benefit from AI, I think aerospace and defense infrastructure will benefit from electric vehicles and self-driving cars, AI will impact everything.
So I think we’re still in the early stages, and in the early stages, it’s kind of like, who has the hottest names?
And people are buying it.
And the second step is to consider what is needed to run the AI.
And I think people will start to look at things like uranium, copper, and energy.
And I think people will be looking at things like telecommunications, Contec connectivity, 5G, 6G.
And when you look at companies like Lily and healthcare companies across a range of pharmaceuticals, you see them using AI to do more efficiently and increase revenue.
So the extent to which investors are aware or at least evaluating at this point the incorporation of AI into cybersecurity as an investment strategy is going to have an impact on everything, because this is one of the core concerns of users, even for companies that are looking to build data centers that leverage these chips that have impactful technological capabilities.
And the core user, the customer like you and me, is saying that it reaches me and I know when I leverage it and I open the app, it’s going to give me something back that’s going to save me time based on what I’ve prompted.
Yeah.
And actually, you’ve given me two new ideas to consider for ETF S.
I love doing it.
You should look at the Cloud ETF S and the Cyber Security ETF S. This is a great point.
Um, the idea is to have all this data, right?
And this data needs to be protected and stored somehow, so we use the cloud for storage.
It’s your Amazon, it’s your Microsoft.
Uh, and, you know, in the cyber security space, we have Palo Altos and other types of companies. Those are two great spots to watch, especially given the current concerns with things like Tik Tok and trade relationships with our Asian peers and the world as it relates to cyber security, which is definitely going to be a big theme. And when you add AI to the mix, it creates an even bigger opportunity for annual growth.
In my opinion, this may be my first ETF white paper.
I don’t know for sure. Maybe they just throw it away.
That’s exactly right.
Sopha Jablonsky defines ETF CEO and CIO.
Nice to meet you.
We are very grateful for your participation.
Thank you for inviting me.