Industrial and infrastructure stocks maysoonshare the spotlight with theartificial intelligence trade.
According to ETF Action’s Mike Atkins, there’s a bullish setup taking shape due to both policy and consumer trends.His prediction comes during a volatile month for Big Tech and AI stocks.
“You’re seeing kind of the old-school infrastructure, industrial products that have not done as well over the years,”the firm’s founding partner told CNBC’s “ETF Edge” this week. “But there’s a big drive… kind of away from globalization into this reshoring concept, and I think that has legs.”
Global X CEO Ryan O’Connor is also optimistic because the groups support the AI boom.His firm runs theGlobal X U.S. Infrastructure Development ETF (PAVE), which tracks companies involved in construction and industrial projects.
“Infrastructureis something that’s near and dear to our heart based off of PAVE, which is our largest ETF in the market,” said O’Connor in the same interview. “We think someof these reshoring efforts that you can get through some of these infrastructure places are an interesting one.”
The Global X’sinfrastructure exchange-traded fundis up 16%so far this year,while the VanEck Semiconductor ETF (SMH), which includes AI bellwethers Nvidia, Taiwan Semiconductor and Broadcom,is up 42%,as of Friday’s close.
Both ETFs are lower so far this month — but Global X’s infrastructure ETFis performing better.Its top holdings, according to the firm’s website, areHowmet Aerospace, Quanta Services and Parker Hannifin.
Supporting the AI boom
He also sees electrification as a positive driver.
“All of the things that are going to be required for us to continue to support this AI boom, the electrification of the U.S. economy, is certainly one of them,”he said, noting the firm’s U.S. Electrification ETF (ZAP) gives investors exposure to them.The ETF is upalmost 24%so far this year.
The Global X U.S. Electrification ETF is alsoperforming a few percentage points better than theVanEck Semiconductor ETF for the month.
About The Author
