This question has come up a few times, but I will answer it…
There are a few ways to invest in AI/Machine Learning
• FAANG stocks
FAANG stocks have a lot of potential regarding machine learning and ai. If you look in the US and eastwards towards China, you see companies driving an enormous amount of resources into big-tech.
I think the potential for big-tech in the US is huge, however I think the fallout will be costly. If I was a betting man, I would say that the automation of basic jobs will create resentment and anger. This anger, combined with the power it will give big-tech, will almost inevitably lead to big-tech regulation.
Also… if you are chasing big returns, FAANG stocks are already very big. If Apple were to double in size, it would be worth a staggering $1.8 Trillion!
Passive investing is definitely an option as well. If you were to invest in robotics/ai ETFs, you should choose your entry point very wisely. Today there is an enormous amount of hype regarding the rise of machine learning…and the stock market reflects that.
If you were to invest at time of disillusionment, I think you could make a killing in the long run.
This is against the gospel of index funds, and I daresay John Bogle might not agree.
But even John doesn’t get it right every time.
iShares have an ETF which I was looking at - https://www.ishares.com/uk/institutional/en/products/284219/
Personally, I would avoid these ETFs as the basis of their composition is unclear. They are not tied to an index, meaning that someone just chose them out of nowhere!
I think the infrastructure for machine learning and ai is far more interesting - mainly the chip companies which produce the technology needed for ai systems.
We have looked at NVidia in a few posts previously that looks that a solid investment.
Alternatively, Graphcore is an english start-up which has been backed by some serious players in the venture business.
Alternatively, you could invest in the iShares PHLX Semiconductor ETF, which focuses on semi-conductors in various industries. It is not exclusive to ai, but it will give you exposure…