- Artificial Intelligence (AI) is predicted to dominate in investments for 2024, according to the investment chief at Global X ETFs, Jon Maier.
- Global X’s exchange-traded fund (ETF) provides investment exposure to AI leaders.
- Despite significant growth in 2023, Maier believes the momentum of AI investments will not slow down, as AI has the potential to impact numerous sectors and has staying power.
- Nearly all of the top-performing stocks for this year have a connection to AI, including Nvidia, the leader in the S&P 500 year-to-date.
- Other promising investment avenues for 2024 include cloud computing and cybersecurity, small caps, equities in emerging markets, particularly India, and energy sectors like uranium, infrastructure firms, and master limited partnerships.
- Maier also suggests considering covered-call products if markets are predicted to be range-bound next year.
In terms of future investment trends, AI continues to be a dominating force as it impacts various sectors and goes beyond semiconductors and chatbots. Global X ETFs, a $48 billion firm, offers the largest AI-focused ETF, the Global X Robotics & Artificial Intelligence ETF, providing exposure to AI leaders, and Maier believes the momentum for such investments will not slow.
Nvidia, an AI-connected company, is a perfect example as the company has taken the lead in the S&P 500 leader board for the year. Maier believes Nvidia holds a massive first-mover advantage, making it an essential AI investment contender.
But it’s not just AI. For 2024, Maier also promotes investment in areas such as cloud computing and cybersecurity, especially considering the increasing amount of data, more cloud services, and more cyber threats. Investors can get exposure to these areas through the Global X Cloud Computing ETF and the Global X Cybersecurity ETF.
Additional possibilities include investing in equities in emerging markets, particularly India which, with its demographic advantages and ability to attract foreign investment, presents significant opportunities. Among other sectors Maier mentioned were energy, infrastructure firms, and master limited partnerships which are linked to the Global X funds.
While AI stocks are valued high, Maier believes that valuations, in general, are not particularly out of proportion, except maybe for a few mega-cap tech firms. He mentions that the seven largest stocks in markets are up by an enormous 102% through December 2023, while the other components of the S&P 500 are up 9.9%.
Finally, he cites covered-call products, including Global X’s S&P 500 Covered Call ETF and Nasdaq 100 Covered Call ETF, as a top idea if markets are expected to be range-bound in 2024. These strategies generate extra income by selling call options on equities but may mean missing out on opportunities if the underlying stock rallies significantly.