It’s time for another update for the InvestorPlace Best ETFs contest. My pick, the Global X Robotics & Artificial Intelligence Thematic ETF (NASDAQ:BOTZ), has performed reasonably well for the year so far with a year-to-date return of 19%.
Unfortunately, it ranks No. 4 among the others. The top performer is the iShares U.S. Home Construction ETF (BATS:ITB), which was the choice for Vince Martin. He made a very shrewd call that the sector was way oversold.
Regardless, I’m still bullish on BOTZ. Hey, for the years to come, I think it has the potential for being among the best ETFs.
There are several reasons for this. First of all, AI represents a truly transformational technology that has wide appeal. We’ve already seen how companies like Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT) and Facebook (NASDAQ:FB) have leveraged it for their own platforms. AI offers benefits of lower costs, better predictions and accurate insights.
Here are some data points to consider:
- PWC projects that AI will add a whopping $15.7 trillion in value to the global economy by 2030
- IDC projects that spending on the technology will go from $24 billion in 2018 to $77.6 billion by 2022
- For other categories related to AI like robots and drones, which are included in the BOTZ ETF, IDC expects that spending on these categories will jump from $115.7 billion to $210.3 billion
AI and the Best ETFs
So what were some of the developments in the latest quarter for BOTZ? Let’s take a look at a few:
- Nvidia (NASDAQ:NVDA): This is one of the premier AI companies. The company’s core technology — GPUs or Graphics Processing Units — have proven to be ideal for the technology, in terms of the high speed, efficiency and parallel processing. While NVDA has had its challenges, such as with the U.S.-China trade war and the competition from operators like Advanced Micro Devices (NASDAQ:AMD), the company has been able to get things back on track. This was evident in its latest earnings report, in which the company beat expectations on both the top and bottom lines. NVDA also should get a boost from its expected acquisition of Mellanox Technologies (NASDAQ:MLNX). Oh, and yes, the company continues to push the boundaries of innovation, such as with its autonomous driving car segment.
- Brooks Automation (NASDAQ:BRKS): For the year so far, the shares are up about 45%. The company’s automation systems for semiconductors are seeing much uptake because of megatrends like IoT (Internet-of-Things), 5G and yes, AI. The company has also focused on the valuable life sciences market, which should help with long-term growth. According to the CEO, Steve Schwartz, in the earnings press release: “We believe each of our businesses hold great advantages and are positioned nicely in strong markets with additional opportunity as we go into the final quarter of our 2019 fiscal year.”
- iRobot (NASDAQ:IRBT): This stock is one of the reasons that BOTZ is not one of the best ETFs. The performance for the company has been absolutely awful. During the last quarter, IRBT stock has lost about 36% of its value. Then again, in July, the company issued a disappointing earnings report that showed a deceleration on the top line. The problem? It really comes down to the situation in China. Keep in mind that a hefty amount of sales come from the country.
Tom Taulli is the author of the book, Artificial Intelligence Basics: A Non-Technical Introduction. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.