Dan Ives of Wedbush Securities, who launched the Artificial Intelligence Exchange Transaction Fund this month, sees the software as a subcategory for viewing within the space.
According to Ives, they are experiencing a “golden age.”
“The software is going to be driving… a lot of use cases,” the company’s global technology research director told CNBC’s ETF Edge this week. “But we’re trying to understand that because, in the software, who’s making the phone call. Just because they say ‘AI’ on a conference call doesn’t make you an AI player. ”
Ives runs the Dan Ives Wedbush AI Revolution ETF, which is traded under Ticker Ives. Ives’ goal is to focus on stocks that are changing the AI landscape.
“I think the market is still significantly underestimating how the growth of the high-tech AI revolution will look,” he said. “For us, it’s not just Mag Seven. It’s not just the first four or five names… Today, Themetally Themestally is trying to identify names that don’t even think of AI names.”
He predicts that Oracle will be “the epicenter of AI themes for the next six months and 12 months from a software perspective.” As of the closing of the market on Tuesday, Oracle’s shares have risen nearly 62% over the past two months. It is Ives’ fourth largest holding, according to the company’s website.
Other software holdings from Ives include Palantir, IBM and Salesforce. They have also been the winners of the past two months, with Palantir stock rising over 47%.
Overall, Ives’ holdings cover 30 companies across multiple industries. Includes Hyperscalar, Cybersecurity, Consumer Platforms and Robotics. According to Ives, the list was put together from his deep dive into a major AI player.
“Around the world, investors always say, ‘How do you play AI? How do you play themes?'” Ives said. “All our research allows us to put it in a way that allows us to play this, regardless of where the investors are and who they are.”
The top three holdings of the fund are overall Microsoft, Nvidia and Broadcom, but they also include small-sized technology names such as Soundhound and Innodata.
Ives has risen nearly 3% since its launch on June 4th. In an email to CNBC, Ives wrote that the ETF has $183 million in assets under management as the market approaches Tuesday.
Ives plans to reevaluate AI 30 quarterly.
“There may be a name that isn’t there today,” he said. “Six months from now, if I find out that it’s a name that will become more and more AI play, I’ll put it there.”
Ives argues that high-tech trade is still worth the investment, even for investors who have missed out on doing so over the past few years.
“If we focus solely on valuations, we’re overlooking all the transformative tech stocks of the past 20 years,” Ives said.
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