AI Industry Updates

The ARTI ETF continues to demonstrate its strength and resilience in the tech and AI sectors, driven by significant developments and robust earnings from its key holdings, AAPL, NVDA, and MSFT. Over the past month, these companies have made strategic advancements that not only reinforce their market positions but also highlight the ETF’s potential for sustained growth.

Apple has reported better-than-expected Q4 revenue, despite a one-time EU tax charge, thanks to strong iPhone sales and plans for Apple Intelligence updates. The company’s strategic shift to diversify manufacturing away from China has been bolstered by its India operations, with iPhone exports from India nearing $6 billion in six months. This move is part of Apple’s broader strategy to enhance its global manufacturing footprint and reduce dependency on China.

NVIDIA continues to lead in the AI sector, driven by a surge in demand for its AI chips. The company has maintained its position as a dominant force, with strategic partnerships and technological advancements setting the pace for the industry. NVIDIA’s focus on AI technology and its applications across various sectors underscores its commitment to innovation and market leadership.

Microsoft has been actively enhancing its AI and cloud services, with new developments aimed at revolutionizing business processes. The company’s strategic initiatives in AI, including partnerships and sustainable energy projects, align with global net-zero goals and position Microsoft as a leader in AI innovation. These efforts reflect Microsoft’s dedication to advancing its technological capabilities and expanding its market influence.

The ARTI ETF’s strategic focus on AI and technological innovation positions it well to capitalize on emerging market trends and deliver robust returns. The recent developments across its key holdings reflect a strong commitment to innovation and market leadership, reinforcing the ETF’s potential for sustained success.

September Recap: Key Earnings Developments

• Apple: Reported a record September-quarter revenue of $94.93 billion, driven by strong iPhone 16 sales.

• NVIDIA: Continued to lead in the AI sector with strong demand for its AI chips, maintaining its market leadership.

• Microsoft: Enhanced its AI and cloud services, positioning itself as a leader in AI innovation.

September Recap: Major News Developments

• Apple: Surpassed expectations with strong iPhone sales and plans for Apple Intelligence updates.

• NVIDIA: Maintained its position as a dominant force in the AI sector, driven by strategic partnerships and technological advancements.

• Microsoft: Advanced its AI initiatives with new developments aimed at revolutionizing business processes.

The ARTI ETF’s focus on AI and tech innovation continues to drive its growth, offering promising opportunities for investors. The strategic advancements and partnerships within its portfolio highlight the ETF’s resilience and potential in the evolving tech landscape.

October Key Earnings Development

• INTC secured a multi-year, multi-billion dollar commitment from AMZN for a new custom Xeon 6 chip and a new AI Fabric chip, showcasing confidence in Intel’s technology and its ability to deliver custom solutions for major cloud providers.

• AMZN hosted its most successful Prime Day and Prime Big Deal Days ever, with customers saving over $5 billion across more than 50 million deals, highlighting strong customer engagement and sales volume.

• AAPL’s services revenue reached an all-time high of $25 billion, up 12% from a year ago, underscoring the expanding and lucrative nature of Apple’s services segment.

• Amazon’s advertising revenue grew to $14.3 billion for the quarter, marking an 18.8% year-over-year increase, emphasizing the growing importance of advertising as a revenue stream.

• Intel’s Mobileye continues to lead in advanced driver assistance systems, reinforcing Intel’s strength in the autonomous driving solutions market.

• Amazon’s free cash flow increased dramatically to $46.1 billion, up 128% year-over-year, indicating strong liquidity and financial flexibility.

• Apple’s operating cash flow reached a new September quarter record of $26.8 billion, reflecting strong financial health and operational efficiency.

• Amazon AWS grew 19.1% year-over-year, reaching a $110 billion annualized run rate, highlighting its strong market position and demand for cloud services.

October Major News Developments

• SMCI faced significant challenges, including a stock plummet of over 30% following the resignation of its auditor, Ernst & Young, due to concerns over governance and financial controls. Additionally, the company is under investigation by the US Department of Justice for false or inaccurate statements, contributing to a further drop in its share price.

• AAPL has been active with several developments, including the launch of the iPhone 16 Pro Max, which costs significantly more to produce but maintains a high profit margin. The company has significantly increased its iPhone manufacturing presence in India, exporting nearly $6 billion of India-made iPhones in six months and starting the manufacturing of the iPhone 17 base model in the country for the first time. Apple reported a record September-quarter revenue of $94.93 billion, a 6% increase, but faced a profit drop due to a $10.2 billion EU tax charge, impacting net income to $14.74 billion.

• AMZN announced a partial dismissal of the FTC’s antitrust lawsuit, which accused it of maintaining illegal monopolies in online marketplaces. The company reported significant growth in its AWS segment, with a 19% revenue increase and record profit margins, contributing to an overall 11% rise in net sales and beating Wall Street’s expectations.

• MSFT has been involved in several strategic moves, including the launch of a new “Call of Duty” game on Microsoft’s Game Pass, which led to record sign-ups and did not significantly impact full game sales, achieving record-breaking player engagement and sales spikes on PlayStation and Steam.

• META expanded its AI chatbot, Meta AI, to new markets, including Thailand and the UK.

• GOOGL faced a class-action lawsuit for allegedly using copyrighted books without permission to train its AI systems. The company has integrated Gemini AI into Google Maps, enhancing user interaction by allowing queries about specific features like restaurant atmospheres and providing AI-generated leisure tips and navigation aids.

Weekly Recap

AMD experienced a significant drop in its stock value due to disappointing earnings and future revenue forecasts, contributing to broader Nasdaq volatility. MSFT has observed a rise in sophisticated phishing attacks, notably by the Russian APT group Midnight Blizzard, targeting various sectors globally. Microsoft’s stock fell nearly 6% following a disappointing revenue forecast, impacting broader tech shares despite strong demand for its AI services and cloud computing capacity. AMZN‘s Q3 earnings report for 2024 showed an 11% revenue increase, driven by retail and advertising demand and the strength of AWS, with the company also focusing on AI monetization and operational efficiency improvements.

The launch of a new “Call of Duty” game on Microsoft’s Game Pass led to record sign-ups and did not significantly impact full game sales, achieving record-breaking player engagement and sales spikes on PlayStation and Steam. Despite a significant decrease in Xbox hardware sales, Microsoft’s gaming revenue soared, primarily due to a 61% increase in content and services revenue, largely attributed to the acquisition of ATVI34.

META has warned of increasing losses in its AI division, Reality Labs, and plans to further invest in AI and futuristic technologies despite the financial strain.

Investing in Artificial Intelligence with ARTI ETF

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

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