Since late 2022, the role of artificial intelligence (AI) in the future of business has emerged as a significant driver of returns, reshaping traditional investment paradigms. The artificial intelligence market is poised for extraordinary expansion, with an estimated 43% compound annual growth rate by 2032 and a total market valuation of $1.3 trillion globally by that time.¹

Amidst this backdrop, Canada’s first-ever fund that uses generative AI in portfolio construction—the Evolve Artificial Intelligence Fund (ARTI ETF)—is set to capitalize on burgeoning growth in the AI sector.

Powered by Gradient Boosted Investments Inc. (“Boosted.ai”) and designed to provide investors with exposure to AI companies deemed to benefit from the increased global adoption of AI, the debut of the Evolve Artificial Intelligence Fund underscores a transformative shift in investment strategies.

AI’s Market Dominance

The meteoric rise of AI-related companies has been nothing short of remarkable, catalyzing gains that have outstripped the broader market indices.

Recent analysis by Bespoke Investment Group reveals that sixty-seven AI-related stocks in the S&P 500 have surged by an average of 45.3% since ChatGPT’s public release in late 2022. This outpaces the 9.2% increase seen in the remaining 433 non-AI stocks in the S&P 500. So far in 2024, AI stocks in the S&P 500 have gained an average of 3.7%, compared to 1.1% for non-AI stocks.² This stark difference underscores AI’s pivotal role in driving market performance and the imperative for investors to embrace this highly active sector.

Industry Titans Embrace AI

The allure of AI’s potential has enticed industry behemoths to aggressively pursue AI-driven initiatives, signalling a seismic shift in technological adoption.

Apple and Google are in negotiations to integrate Google’s Gemini AI into the iPhone for upcoming software features. A potential deal between Apple and Google could expand AI services to over 2 billion active Apple devices while aiding Google’s bid to compete with Microsoft-backed OpenAI. Analysts suggest this alliance fills a crucial gap in Apple’s AI strategy and reinforces Google’s position amidst competition. Previously, Google partnered with Samsung to deploy Gemini in its Galaxy S24 series, aiming to bolster its usage.²

Meta announced it is developing an AI model to power its entire video ecosystem and drive recommendations across Meta’s platforms, including Reels and traditional videos. The development aligns with Meta’s billions of dollars invested in transitioning to Nvidia’s GPUs for AI system expansion. GPUs offer significant performance enhancements, with an 8% to 10% increase in Reels watch time on Facebook. Such a transition emphasizes the strategic importance these companies accord to AI integration.⁴

But it is Nvidia, with a market value of approximately $1.8 trillion, that stands as the leader in this group of S&P 500 heavyweights, buoyed by investor enthusiasm for AI. Nvidia’s shares have hit all-time highs this year, and the company’s total value has skyrocketed 245% since January 2023 as it became the go-to hardware provider for AI, commanding as much as a 95% market share in the machine-learning GPU market⁵ ⁶ ⁷

Led by Nvidia, five of the “Magnificent Seven” tech stocks—Microsoft Corp, Amazon.com Inc, Facebook parent Meta Platforms Inc., and Google parent Alphabet Inc.—have all seen AI-driven growth this year. And beyond the Magnificent Seven, other AI-related companies like Advanced Micro Devices Inc., CorVel Corp., Broadcom Inc., C3.ai, Salesforce Inc., and Intel Corp. have likewise seen gains exceeding the S&P 500’s performance.⁸

Reasons to Invest in ARTI

As investors seek to navigate the dynamic landscape of financial markets, the allure of AI as a transformative force in wealth creation is increasingly apparent.

The Evolve Artificial Intelligence Fund (ARTI) offers investors exposure to this growing AI sector. From the exponential growth trajectory of the AI sector to its transformative impact across industries and ARTI’s pioneering approach to portfolio construction, investors are positioned to capitalize on the paradigm shift ushered in by AI. Here are three reasons ARTI represents a compelling investment opportunity in the era of AI dominance.

1. Explosive Growth Trajectory: The AI sector looks set for exponential growth, with projections indicating a potential market size of $1.3 trillion by 2032. Drawing parallels to the early days of the internet era, this new landscape promises transformation and offers investors exciting opportunities for wealth creation. ARTI’s strategic focus on companies at the vanguard of generative AI positions investors to capitalize on this unparalleled growth trajectory.⁹
2. Driving Efficiency and Innovation: Beyond financial metrics, AI’s value proposition lies in its capacity to drive operational efficiency, foster innovation, and augment decision-making processes across diverse industries. McKinsey forecasts a substantial revenue boost across technology (up to 9% of global industry revenue), banking (up 5%), pharmaceuticals (up 5%), and education sectors (up 4%), underpinned by AI-driven efficiencies. By investing in ARTI, investors gain exposure to companies at the forefront of leveraging AI to unlock operational synergies and drive sustainable growth.¹⁰
3. Pioneering Portfolio Construction: At the heart of ARTI lies its innovative approach to portfolio construction, leveraging Boosted.ai’s proprietary generative AI technology to curate a diversified portfolio of leading AI companies. By harnessing AI to inform investment decisions, ARTI represents a paradigm shift in asset management, capitalizing on AI’s predictive capabilities to identify high-growth opportunities and mitigate risk.

In an era defined by technological disruption and exponential innovation, the rise of AI as a dominant force in the investment landscape is inevitable. Against this backdrop, ARTI emerges as a trailblazer, offering investors a gateway to capitalize on the transformative power of AI.

Investing in Artificial Intelligence with ARTI ETF

Interested in using generative AI to identify the best artificial intelligence and artificial intelligence-related companies fundamentally changing our world today?

Evolve Artificial Intelligence Fund (ARTI) is Canada’s first Artificial Intelligence Fund that uses generative AI in portfolio construction. Now trading. The Evolve Artificial Intelligence Fund is designed to provide investors with exposure to global securities from AI companies deemed to benefit from the increased global adoption of AI.

For more information on the Evolve Artificial Intelligence Fund or any of Evolve ETF’s lineup of exchange-traded funds, please visit our website or contact info@evolveetfs.com.

 

Sources

1. Singh, M., Rana, A., et al., “Generative AI races toward $1.3 trillion in revenue by 2032,” Bloomberg Intelligence, March 08, 2024; https://www.bloomberg.com/professional/blog/generative-ai-races-toward-1-3-trillion-in-revenue-by-2032/
2. Idzelis, C., “AI stocks in the S&P 500 have outperformed this year – and not just the ‘Magnificent Seven,’” Morningstar, February 20, 2024; https://www.morningstar.com/news/marketwatch/20240220162/ai-stocks-in-the-sp-500-have-outperformed-this-year-and-not-just-the-magnificent-seven
3. Coulter, M., “Apple in talks to let Google’s Gemini power iPhone AI features, Bloomberg News says,” Yahoo Finance, March 18, 2024; https://finance.yahoo.com/news/apple-talks-let-googles-gemini-054341739.html
4. Vanian, J., “Meta is building a giant AI model to power its ‘entire video ecosystem,’ exec says,” CNBC, March 6, 2024; https://www.cnbc.com/2024/03/06/facebook-working-on-single-ai-model-to-power-all-video-recommendations.html
5. “Wall Street Bullish on Nvidia and AMD as AI Chip Prospects Soar,” Investing.com, January 16, 2024; https://ca.investing.com/news/stock-market-news/wall-street-bullish-on-nvidia-and-amd-as-ai-chip-prospects-soar-3231572
6. Cook, D., “Better Artificial Intelligence (AI) Stock: Nvidia vs. Alphabet,” Yahoo Finance, January 9, 2024; https://finance.yahoo.com/news/better-artificial-intelligence-ai-stock-100500792.html
7. Carter, R., “Why is Nvidia Stock Going Up? The Rise of Nvidia,” XR Today, January 2, 2024; https://www.xrtoday.com/mixed-reality/why-is-nvidia-stock-going-up-the-rise-of-nvidia/
8. Idzelis, C., “AI stocks in the S&P 500 have outperformed this year – and not just the ‘Magnificent Seven,’” Morningstar, February 20, 2024; https://www.morningstar.com/news/marketwatch/20240220162/ai-stocks-in-the-sp-500-have-outperformed-this-year-and-not-just-the-magnificent-seven
9. Singh, M., Rana, A., et al., “Generative AI races toward $1.3 trillion in revenue by 2032,” Bloomberg Intelligence, March 08, 2024; https://www.bloomberg.com/professional/blog/generative-ai-races-toward-1-3-trillion-in-revenue-by-2032/
10. “The state of AI in 2023: Generative AI’s breakout year,” McKinsey, August 1, 2023; https://www.mckinsey.com/capabilities/quantumblack/our-insights/the-state-of-ai-in-2023-generative-ais-breakout-year

Header Image Source: Getty Images Credit: NanoStockk

The contents of this blog are not to be used or construed as investment advice or as an endorsement or recommendation of any entity or security discussed. These contents are not an offer or solicitation of an offer or a recommendation to buy or sell any securities or financial instrument, nor shall it be deemed to provide investment, tax or accounting advice. The information contained herein is intended for informational purposes only.

Commissions, management fees and expenses all may be associated with exchange traded funds (ETFs) and mutual funds (funds). Please read the prospectus before investing. ETFs and mutual funds are not guaranteed, their values change frequently, and past performance may not be repeated. There are risks involved with investing in ETFs and mutual funds. Please read the prospectus for a complete description of risks relevant to ETFs and mutual funds. Investors may incur customary brokerage commissions in buying or selling ETF and mutual fund units.

Certain statements contained in this blog may constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to a future outlook and anticipated distributions, events or results and may include statements regarding future financial performance. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “anticipate”, “believe”, “intend” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Evolve Funds undertakes no obligation to update publicly or otherwise revise any forward-looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law.