Many investors are fixated on tech and AI ETFs, and for good reason, given how potent AI hype and its subsequent buildout have turned out to be.
Key Takeaways:
- Tech and energy companies used to be viewed as stocks that move in different directions, but that narrative is shifting.
- As AI grows more prevalent, power demands continue to mount, and the energy sector stands to benefit.
- Investors could use the State Street Energy Select Sector SPDR ETF (XLE) to tap into the opportunities within AI power needs and the energy sector itself.
However, there are far more ways to gain exposure to opportunities within technology and AI than simply owning the top tech names. For instance, the energy sector may warrant a closer look for this specific reason.
Some may find this rather ironic, since the narrative used to be “tech vs. energy”, with tech traditionally viewed through a growth lens and energy treated as a short-term value or cyclical play. Today, however, the energy sector is emerging as a strong beneficiary of the ongoing growth in tech.
This is due to the immense power demands that AI requires. AI computing is power-intensive and requires thorough infrastructure to keep its data centers and large language models (LLMs) running.
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