Following scintillating runs by AI-related stocks in 2023, some market observers believe a cooling-off period could be in the cards. However, that doesn’t dent the long-term thesis for AI investing.
If anything, that thesis is as compelling as it’s ever been and that’s good news for the Invesco QQQ Trust (QQQ) and the Invesco NASDAQ 100 ETF (QQQM). QQQ and QQQM have the same lineups. They are among the titans of AI exposure when it comes to ETFs that are not explicitly dedicated to AI.
It’s a good thing, too, because with assistance from marquee companies such as Alphabet (GOOG), Meta Platforms (META), Amazon.com (AMZN), Nvidia (NVDA), Microsoft (MSFT), and Tesla (TSLA) – all of which are QQQ and QQQM holdings – generative AI is expected to become a $100 billion industry by 2026, according to AltIndex.com.
Exponential Growth in the Cards
While generative AI is a new concept, it’s already established a track record of exponential growth. And it’s had profound implications for assets such as QQQ and QQQM.
“Between 2020 and 2023, the market size of generative AI has skyrocketed by a whopping 690%, jumping from $5.7 billion to $44.9 billion. In fact, statistics show the market has been practically doubling for the past three years. With the annual growth rates floating between 93% and 106%,” noted AltIndex.
Regarding the generative AI investment thesis, geography matters. The U.S. is expected to remain a leader on this front, followed by China and, to a lesser extent, Europe. Fortunately, the aforementioned QQQ/QQQM holdings are U.S.-based companies. Some of these companies have significant export exposure to the Asia-Pacific region.
