AI investments will see 'aggressive broadening out': Analyst

The AI revolution is creating a significant market growth, with investors seeking opportunities beyond the traditional semiconductor sector. Tejas Dessai, assistant vice president and research analyst at Global X ETFs, discussed AI investing on the show “Asking for a Trend.” Dessai described the AI trade as a “moment of mass destruction,” highlighting its impact on the global economy, similar to the development of the internet.

Currently, the market is in the “infrastructure buildout phase,” making semiconductors the primary investment focus. However, Dessai anticipates a broadening of AI-related investment opportunities in the future. He advises investors to consider three specific areas: data centers, cloud software and applications, and energy plays, particularly uranium and copper.

Dessai suggests that investors should diversify their investments to find the next phase of growth in AI. He recommends data centers and the entire digital infrastructure value chain, cloud software, cloud applications, cybersecurity, and energy sources like uranium and copper. For example, copper is well-correlated with economic expansion and is essential for building data centers and upgrading infrastructure.

Dessai also suggests taking a passive approach to investing in data centers and digital infrastructure, such as through an ETF like Global X’s Data Centre and Digital Infrastructure ETF. He anticipates a secular buildout that will result in capacity expansion and provide opportunities for data center companies and component manufacturers to grow their earnings at a faster rate than the current market expectations.

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