Enthusiasm for artificial intelligence (AI) is widespread, with epicenters of that ebullience including the investment community and corporate America.
Obviously, there are clear links between the two, and those ties carry implications for ETFs such as the Invesco QQQ Trust (QQQ) and the Invesco NASDAQ 100 ETF (QQQM) -- both of which are heavy on companies that are AI enablers and adopters.
While generative AI -- the most readily accessible and deployed form of this disruptive technology -- is still in its early innings, returns by QQQ and QQQM suggest business and investor confidence in the technology is high. Over the past 24 months, the Invesco ETFs are higher by 26.4%, an advantage of 710 basis points over the S&P 500.
Artificial Intelligence on Breathtaking Pace
In what has been -- and could continue being -- a positive factor for QQQ and QQQM, the pace at which AI is garnering interest and users is staggering. In a recent research report, Invesco noted that Google searches for AI and related terms have surged over the past two years.
Additionally, it took the popular ChatGPT app just two months to reach 100 million users. By comparison, it took Facebook and Twitter 4.5 years and 5.4 years, respectively, to reach that number.
“AI is increasingly being embedded in our economic systems, at every point in the supply chain from R&D to sales, from procurement to marketing to after-sale analysis. Despite only recently breaking into the public limelight, AI already has more than a decade of real-world applications,” according to Invesco.
Expansive Use Cases for AI
Adding to the allure of generative AI for both companies and investors is the point that this technology has expansive usage cases, which could facilitate more corporate-level adoption. That’s relevant to market participants considering ETFs such as QQQ and QQQM because analysts view the business-to-business side of the AI industry as potentially more lucrative over the long term than the business-to-consumer side.
“Better yet, generative tools can also be interactive, responding to user prompts for refinement, assisting with copyediting, and more. These AI systems can help with laborious tasks, such as literature summaries and documenting code, and also help users navigate large amounts of information,” added Invesco.
Another part of the AI investment thesis and one that could bode well for assets such as QQQ and QQQM is the need for increased computing power as AI evolves. As Invesco pointed out, costs to operate ChatGPT can run from $100,000 to $700,000 per day due to evolving computational needs. Some QQQ/QQQM holdings are poised to meet those new demands.
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