Displaying items by tag: ai

The rise of artificial intelligence has sparked an unexpected boom in utility ETFs, driven by soaring electricity demand from power-hungry data centers supporting AI infrastructure. Funds like XLU, VPU, IDU, and FUTY have gained over 7% in the past year, outperforming the broader utility sector. 

Data centers already consume about 1.5% of global electricity, with the U.S. accounting for nearly half, and the International Energy Agency projects this demand to double by 2030. This surge positions electric utilities as critical enablers of the AI revolution, creating a long-term growth runway supported by regulated rate increases and infrastructure expansion. 

Investors have turned to utility ETFs as a way to gain exposure to companies powering the digital economy, particularly U.S. giants like NextEra Energy and The Southern Company. 

Finsum: As AI adoption accelerates, utility ETFs stand to benefit from a sustained and predictable rise in electricity demand.

The Vanguard Information Technology ETF (VGT) offers investors broad exposure to leading artificial intelligence (AI) companies at a very low cost, with an expense ratio of just 0.09%. While not an AI-specific fund, it tracks the information technology sector, which includes many of the world’s biggest AI players such as Nvidia, Microsoft, Apple, and Broadcom. 

About two-thirds of the fund is concentrated in semiconductors and software, meaning its performance is closely tied to the success of a few dominant firms. Compared with AI-focused ETFs like Global X AIQ, which charges 0.68%, VGT’s low fee structure can translate into thousands of dollars in added returns over time. 

However, its heavy concentration — nearly 45% in Nvidia, Microsoft, and Apple — makes it vulnerable to downturns in those key stocks. Overall, VGT provides a simple, low-cost way for investors to benefit from the AI boom without the challenge of picking individual winners.

Finsum: AI makes up a high percentage of GDP growth and this index fund could take advantage of this growing sector. 

Cybersecurity stocks have surged in 2025, fueled by rising global hacking incidents and enthusiasm for AI-driven protection tools. Firms like Zscaler, Cloudflare, and CrowdStrike have gained between 50% and 77% this year, far outpacing broader software benchmarks such as the iShares Expanded Tech-Software ETF. 

The sector’s strength is being reinforced by record corporate spending, highlighted by Alphabet’s $32 billion acquisition of Wiz and growing demand for cloud-based security solutions. 

Despite heightened competition from tech giants like Microsoft and Google, cybersecurity remains a top enterprise priority, with identity and cloud security expected to drive double-digit growth for years. Investors see continued consolidation and platform integration as key to sustaining momentum across the sector.

Finsum: Both attackers and defenders are increasingly using generative AI, creating new markets for firms specializing in identity and AI security like CyberArk and Okta.

Global real estate is shifting from traditional “visible” assets like office towers and shopping malls to “invisible” property such as data centers. These facilities have become essential infrastructure as cloud computing and AI workloads demand massive amounts of power, cooling, and networking. According to CBRE, 95% of major investors plan to boost their allocations to data centers in 2025, with many committing $500 million or more.

The surge in demand is driving enormous capital requirements, with hyperscale facilities costing billions to build. Boston Consulting Group estimates that $1.8 trillion will be needed globally by 2030 to keep pace with AI and cloud growth. 

Despite funding challenges, investors continue to reallocate away from conventional real estate sectors toward alternatives like data centers, battery storage, and related infrastructure. While construction costs and financing hurdles pose risks, institutional capital remains active, signaling that real estate’s future will be increasingly tied to digital infrastructure.

Finsum: Artificial intelligence may also reshape physical office demand as companies adjust headcount and space needs.

Artificial intelligence has remained one of the most resilient sectors in U.S. equities, with companies like Nvidia and Microsoft benefiting from rising adoption even as other sectors faced volatility. 

With trade war and inflation concerns beginning to ease, analysts suggest AI growth could strengthen further, making direct exposure an appealing option for investors. ETFs provide one way to access this theme, but careful due diligence is essential in selecting strategies with the best long-term potential. 

The Alger AI Enablers & Adopters ETF (ALAI) differentiates itself by using bottom-up research and active management to uncover overlooked AI innovators. Its proprietary framework emphasizes companies showing high unit volume growth or positive lifecycle changes, positioning the fund to potentially outperform passive AI ETFs. 

Finsum: Investor interest is already growing—FactSet data shows ALAI attracted $40 million in net flows in July 2025, signaling strong confidence in its approach.