Nvidia (NASDAQ:NVDA) is ruling the artificial intelligence (AI) landscape. Nvidia, once only known to tech enthusiasts, has become a household name thanks to Chat GPT and the generative AI frenzy. While it is a no-brainer AI stock to buy and hold to leave a boatload of wealth for your retirement and future generations, there are other ways to invest in AI.
Source: Getty Images
Stock ideas for AI
AI is a concept that can be applied across verticals at various stages of operations, from smart searches to customer support to data analytics. AI can also drive cars, deliver orders, manage traffic, write content, automate robotic factories, and do more.
Similar to how Nvidia provides the hardware, some companies are experimenting with AI to enhance their software offerings. Some companies are offering AI cloud services. There are also automotive companies developing autonomous cars and companies offering AI electronics. And the threat that comes with every new tech will come with AI too. With AI able to learn about your trends, the techmology could probably deduce your passcodes. Data theft would also advance, and that would require advanced AI-level security.
The impact of AI will reflect a little later in the earnings of such companies, as AI needs to be fully integrated into the digital ecosystem.
Investing in AI-themed ETFs
While the semiconductor industry has few players, AI applications are vast. In each application, there are several players. Given the broad scope of AI applications, a smart way to invest is in an ETF that invests in companies that are using AI.
The Global X Artificial Intelligence & Technology ETF (NASDAQ:AIQ) does just that. It has invested in 84 companies leveraging AI to enhance their products and services. Some of the names include Adobe and Salesforce. These 84 companies operate in verticals like information technology, communication services, consumer discretionary, and industrials.
With one ETF, you get exposure to all 84 companies. If even a handful of these flourish, it can generate high double-digit growth. Even an ETF can help you generate wealth given the potential AI holds. The ETF is a cost-efficient way to diversify your investment across various stocks when the future is highly uncertain. It will protect you against company-specific risks. And since the theme is AI, it will protect you from industry-specific risk.
For a 0.68% expense ratio, you can keep buying into this ETF to beat market returns.
Investing in AI digital and cloud services
As companies are incorporating AI, IT service companies are adding AI solutions to their tech offerings. Just like the digitization trend created a new revenue stream for IT services, AI could do the same. IT services firm Telus International (TSX:TIXT) has developed several AI tools that follow high ethical standards. It is offering these solutions to help enterprises incorporate AI without worrying about the security of their data.
Telus provides media and content , customer service, and digital health solutions, and more. It has the backing of its parent Telus Corporation, which is providing 5G services in Canada. The company can collaborate with the parent to offer packaged services of broadband, cloud solutions, and IT services.
