It has long been said that there is an ETF strategy for nearly every conceivable investing theme. And, it’s basically true. There have been multiple ETFs targeting robotics, automation and artificial intelligence stocks, but a new research-focused ETF on A.I. is drawing attention to the A.I. theme in a research-focused manner. This means that analyst research reports and current/future analyst criteria will likely feed directly into the daily buys and sells of stocks within the ETF.
Wedbush Fund Advisers has launched a new AI-focused ETF called the Dan IVES Wedbush AI Revolution ETF (IVES) as a means to invest in the top 30 companies leading the AI Revolution. The ETF is built around the research framework of renowned analyst Dan Ives of Wedbush Securities. According to the press release, the ETF targets companies “driving AI’s infrastructure and deployment across semiconductors, hyperscalers, cybersecurity, consumer platforms, robotics, and cloud infrastructure.” The press release also said that these are the companies which “form the backbone of a multi trillion-dollar investment cycle transforming global industries and accelerating enterprise and consumer adoption.”
Again, this is a research-driven model for an ETF rather than just based on a preset index or daily whims of portfolio managers tracking set themes. The 30 public companies as the ETF holdings are to be drawn directly from Dan Ives’ multi-year proprietary research behind “The AI Revolution Theme” which are said to be at the core of the AI spending cycle. These also cover the full spectrum of industries powering the AI economy rather than just the chip or software plays, from infrastructure to implementation. The target will be public stocks with established momentum and also long-term potential to lead in enterprise and consumer AI adoption.
Wedbush’s release indicated that the ETF will be strategically weighted to reduce concentration risk while maintaining high-conviction thematic exposure. The ETF press release did make a special not about its calculation methodology risk:
The Index relies directly or indirectly on various sources of information to assess the criteria of issuers included in the Index, including information that may be based on assumptions and estimates. Neither the Fund nor the Adviser can offer assurances that the Index’s calculation methodology or sources of information will provide an accurate assessment of included issuers or a correct valuation of securities, nor can they guarantee the availability or timeliness of the production of the Index.
While this is not meant to be the exact list of “Outperform” ratings from Dan Ives at Wedbush Securities, this is the list of 42 public stocks that Wedbush counts as Ives’ full coverage list:
- Apple, Inc. (AAPL)
- C3.ai (AI)
- Check Point Software Technologies Ltd (CHKP)
- CI&T Inc. (CINT)
- Consensus Cloud Solutions Inc. (CCSI)
- Cyberark Software Ltd (CYBR)
- DocuSign (DOCU)
- Electric Last Mile Solutions Inc (ELMS)
- Faraday Future Intelligent Electric Inc. (FFIE)
- Fortinet, Inc. (FTNT)
- General Motors Company (GM)
- Getaround, Inc. (GETR)
- Huron Consulting Group Inc. (HURN)
- Innodata Inc. (INOD)
- International Business Machines (IBM)
- Lithium Americas Corp (LAC)
- Lyft, Inc. (LYFT)
- Microsoft Corporation (MSFT)
- Nice LTD (NICE)
- Oklo Inc (OKLO)
- OneStream Inc. (OS)
- Palantir Technologies Inc. (PLTR)
- Palo Alto Networks, Inc. (PANW)
- Paymentus Holdings INC (PAY)
- Pegasystems, Inc. (PEGA)
- Planet Labs PBC (PL)
- Qualys, Inc. (QLYS)
- Rivian Automotive Inc (RIVN)
- Salesforce.com (CRM)
- SolarWinds Corp (SWI)
- SoundHound AI Inc (SOUN)
- Telos Corp. (TLS)
- Tenable Holdings, Inc. (TENB)
- Tesla (TSLA)
- The Metals Company Inc (TMC)
- Uber Technologies, Inc. (UBER)
- Varonis Systems, Inc. (VRNS)
- Verint Systems, Inc. (VRNT)
- VinFast Auto Ltd (VFS)
- Willdan Group (WLDN)
- Xos Inc. (XOS)
- Zscaler Inc. (ZS)
The list of 42 public companies above is also subject to change based upon future IPOs and mergers. And the list could also be expanded or shrunk based on how well (or poorly) AI-themed companies perform in their AI ambitions.
If the ETF measures assets in the tens-of-millions or hundreds-of-millions in assets under management, then it is unlikely to have a direct influence on many of the smaller companies from that list. If the list gets into the billions to tens-of-billions in assets under management, then it would be easy to expect that this ETF alone could create hundreds-of-millions of dollars into (or out of) certain AI-themed stocks when Dan Ives upgrades or downgrades his list of stocks under coverage.
