- AI has the potential to revolutionize industries, but identifying future market leaders is a daunting task.
- Silvia Jablonski does it by investing in both up-and-coming and tech companies.
- She shared six stocks to buy that could one day rule the AI world.
As the topic of artificial intelligence and its transformative power continues to dominate the headlines, investors are also scrambling to join the movement.
This is the phenomenon that Silvia Jablonski, CEO and chief investment strategist at the Defiance ETF has been patiently waiting for.
“This is and will continue to be the Fourth Industrial Revolution,” she told Insider in a recent interview, advancing areas such as environmental science, self-driving cars, manufacturing, healthcare, retail, lending and advertising. He mentioned the potential of AI to make
He added, “Many investors and market watchers are wondering how powerful AI is, how highly valuable AI is, and what it means for computers to start thinking and acting like humans. I’m really beginning to understand what to do,” he said.
In that role, Mr. Jablonski is responsible for managing $900 million in assets. She also oversees her Defiance Quantum ETF (QTUM), which invests in quantum computing and machine learning companies. The fund has returned more than 11% year-to-date and has totaled almost 81% since its inception in September 2018.
Because of AI’s ability to advance so many different industries, Jablonski’s investment strategy is based on a more general approach. “We basically look at every sector and just try to figure out which companies are leading innovation in that sector,” she explained.
But as with any early-stage investment, it’s difficult to predict exactly which companies will dominate in AI and natural language processing and which will die out. To balance this risk, Jablonski has carefully strengthened his portfolio by including industry powerhouses such as Microsoft.
“They are the clear leaders and will invest in artificial intelligence, data pricing, machine learning and quantum computing, no matter what happens,” she explained. “Those things will probably come to fruition and be a major factor in revenue, but if there is a delay, if it takes longer, costs more, and increases R&D spending, they will also , It’s also a quality company that delivers results.” ”
On the other hand, smaller, newer, lesser-known companies tend to have more concentrated revenue streams, so Jablonski evaluates them cautiously on an individual basis. She carefully examines each company’s income statement, market capitalization, tradability, liquidity, dedication, and AI-powered revenue generation.
“Some of these companies may end up failing in research and development, or some small companies may go bankrupt due to high leverage and rising interest rates. ,” Jablonski said. “But even if it does, we’ll be fine because we have quality tech companies that will hedge our baskets…we see that as a balance and an opportunity.”
6 AI stocks to invest in now
Of course, Jablonski encouraged investors to consider exchange-traded funds as a great way to gain exposure to AI while enjoying the benefits of diversification. Besides Defiance Quantum ETF (QTUM), options include Global X Robotics & Artificial Intelligence ETF (BOTZ), ALPS Disruptive Technologies ETF (DTEC) and iShares Robotics & Artificial Intelligence Multi-Sector ETF (ITRBO). There is also
Jablonski also cited six other stocks she’s eyeing, including tech giants Microsoft (MSFT) and Google (GOOG).
She explained that Microsoft has not only partnered with OpenAI, but also announced a new search engine powered by Google competitor ChatGPT. Jablonski added that Google also recently introduced Bard, a generative AI chatbot that could revolutionize search.
“Microsoft and Google are arguably the leaders in AI on many levels, through search engines and web services,” Jablonski said.
She also likes NVIDIA (NVDA) and Advanced Micro Devices (AMD). Both have the potential to become “AI darlings.”
“Semiconductor chips are basically the linchpin of AI. Without them, we have no data to process and no processing speed,” Jablonski explained. “These two companies are the purest players in all AI use cases.”
As data processing increases by 40% over the next five years, combined revenue for the two companies could reach about $300 billion, Jablonski said. Moreover, with solid balance sheets, both Nvidia and Advanced Micro Devices are basically quality companies in this space.
Amazon (AMZN) also rallied thanks to its web services and machine learning divisions. Specifically, the company has invested in optimizing the customer’s shopping experience by improving its assortment and logistics, Jablonski said.
“They use machine learning and quantum computing on historical data to predict future outcomes. By helping us find ways to improve our services, we will also be a provider of these kinds of applications: “transactions, sales, declines,” she explained.
As a finalist, Jablonski chose Ambarella (AMBA), which provides software processors for security cameras. The company is fundamentally sound, with low debt and a healthy balance sheet.
“What would be the key components of a self-driving car? It would be cameras and visualization. So Ambarella is a key component technology company,” she explained.
