Industrial and infrastructure stocks could soon share the spotlight with the artificial intelligence sector.
According to Mike Atkins of ETF Action, a bullish pattern is emerging due to both political and consumer trends. His prediction comes during a volatile month for big tech and AI stocks.
“You’re seeing sort of old-school infrastructure, industrial products that haven’t worked as well over the years,” the firm’s founding partner told CNBC’s “ETF Edge” this week. “But there’s a big trend… away from globalization and toward this concept of reshoring, and I think that makes sense.”
Ryan O’Connor, CEO of Global X, is also optimistic as groups support the AI boom. His company manages the Global X US Infrastructure Development ETF (PAVE)which tracks companies involved in construction and industrial projects.
“Infrastructure is something we care about and is based on PAVE, which is our largest ETF in the market,” O’Connor said in the same interview. “We think some of the relocation efforts that can be done through some of this infrastructure are interesting.”
Global VanEck Semiconductor ETF (SMH)which includes AI indicators Nvidia, Taiwan Semiconductor And Broadcom, is up 42%, as of Friday’s close.
Both ETFs are down so far this month, but Global X’s infrastructure ETF is performing better. Its main titles, according to the company’s website, are Howmet Aerospace, Quanta Services And Parker Hannifin.
Supporting the AI boom
He also sees electrification as a positive driver.
“All the things that are going to be necessary for us to continue to support this AI boom, the electrification of the U.S. economy, are certainly part of that,” he said, noting that the company’s U.S. Electrification ETF (ZAP) provides exposure to investors. The ETF is up nearly 24% so far this year.
The Global X US Electrification ETF also outperformed the VanEck Semiconductor ETF by a few percentage points for the month.
