Four Artificial Intelligence Funds to Purchase for Income and Growth

Four artificial intelligence funds to purchase for income and growth amid a technology bull market could provide potent potential profits.

The four artificial intelligence funds to purchase for income and growth in a technology bull market have risen in 2023 and seem poised to climb further. Investors who can withstand volatility may want to take a chance on tantalizing technology trends to attain towering heights.

Governments in China and elsewhere are moving toward regulating artificial intelligence (AI) due to the potential dangers and misuses of the technology. Billionaire technology entrepreneur Elon Musk, the owner and CEO of Twitter, Inc. (NYSE: TWTR), CEO of Tesla Inc. (NASDAQ: TSLA) and founder and CEO of privately held SpaceX, said during a recent podcast with presidential candidate Robert F. Kennedy Jr. that he learned in a recent trip to China that regulation of AI there seemed highly likely.

Despite headwinds that include inflation, a tight Fed money supply and a brewing banking crisis after several recent financial institution failures, the NASDAQ Composite tilt toward technology has led to about a 27.5% year to date, as of June 16. Those who define a bull market as one that jumps at least 20% have witnessed it emergence in the technology sector so far in 2023.

Four Artificial Intelligence Funds to Purchase For Income and Growth: XLK

A champion of technology stocks and funds in 2023 is Mark Skousen, PhD, an economist who serves as a Presidential Fellow at Chapman University and heads the Forecasts & Strategies investment newsletter. Skousen, who is a descendant of founding father, diplomat and inventor Benjamin Franklin, also is a seasoned forecaster who recommended Technology Select Sector SPDR Fund (NYSE: XLK) in Forecasts & Strategies. That fund has jumped 40.64% so far in 2023 through June 16.

Mark Skousen, head of Forecasts & Strategies, meets with Paul Dykewicz.

Professor Picks One of Four Artificial Intelligence Funds to Purchase for Income and Growth

Technology Select Sector SPDR Fund offers a current dividend yield of 0.8%. Professor Skousen said its secret is that the fund’s holdings are heavily weighted toward some of the most successful technology stocks so far in 2023: Microsoft (NASDAQ: MSFT), climbing 45.72%; Apple (NASDAQ: AAPL), soaring 43.52%; NVIDIA (NASDAQ: NVDA), zooming 191.95%; Broadcom (NASDAQ: AVGO), gaining 58.82%; and Salesforce (NASDAQ: ), up 59.71%.

Skousen, who also heads the TNT Trader advisory service that recommends both stocks and options, instructed his followers to take a profit on May 25 of 323.96% by selling call options in Nvidia Corp. that he recommended on May 2. The stock rose 34% in just a few months during the time Skousen recommended it, while the options sold in parts at varying levels to produce an average gain during the same time of 196%.

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Microsoft (NASDAQ: MSFT), an income-paying software development company in Redmond, Washington, is engaged in artificial intelligence. The company reported better-than-expected results for its fiscal third quarter, especially in its Microsoft Cloud business, according to Chicago-based investment firm William Blair & Co. Third-quarter revenue for Microsoft finished $1.8 billion ahead of consensus estimates.

The company’s fiscal fourth-quarter revenue guidance came in roughly $640 million ahead of consensus estimates, after adjusting for currency headwinds, according to William Blair. Income investors may appreciate Microsoft paying a dividend yield of 0.82%.

Even though Microsoft Azure — a cloud platform of more than 200 products and cloud services — is expected to keep decelerating to mid-20% growth in the fourth quarter, demand for AI infrastructure is proving to be a growth tailwind. AI has boosted the company’s Azure results and outlook, William Blair wrote in a recent research note.

“Azure growth of 31% was one percentage point ahead of guidance,” according to William Blair. “Nonetheless, this represented a deceleration from second-quarter growth of 38% due to continued pressure from customers looking to reduce consumption and optimize costs.”

Despite increased scrutiny on spending and lower cloud consumption related to weaker macro activity — conditions expected to persist in the near term — Microsoft showing robust momentum for its OpenAI Azure Services offering, which grew to 2,500 customers in the third quarter, when its growth quarter-over-quarter rose 10 times, according to William Blair.

Chart courtesy of www.stockcharts.com

Four Artificial Intelligence Funds to Purchase For Income and Growth: TDIV 

A broad-based fund with a decent dividend yield that offers some exposure to artificial intelligence is First Trust NASDAQ Technology Dividend Index (TDIV). The ETF tries to track the Nasdaq Technology Dividend Index, which is composed of technology and telecommunications companies, said Bob Carlson, a pension fund chairman who heads the Retirement Watch investment newsletter.

Bob Carlson, head of Retirement Watch, meets with Paul Dykewicz.

TDIV recently had 94 holdings, and its 10 largest positions accounted for 59% of its assets. The biggest weightings recently were Microsoft (NASDAQ:MSFT), Apple (NASDAQ: AAPL), Intel (NASDAQ: INTC), Broadcom (NASDAQ: AGVO) and IBM (NYSE: IBM). Roughly 13% of the fund is invested in communication services, while the rest fit into the technology sector.

The fund lost 22.12% in 2022 but is up 24.60% so far in 2023. Plus, the stock’s dividend yield hovers near 2.1%.

Chart courtesy of www.stockcharts.com

PSJ Picked Among Four Artificial Intelligence Funds to Purchase for Income and Growth

A third way to gain exposure in artificial intelligence is through Invesco Dynamic Software (PSJ), a fund aimed at tracking the Dynamic Software Intellidex Index. PSJ consists of approximately 30 companies engaged in businesses related to software applications, systems and information services, said Bob Carlson, who recommends both stocks and funds in his Retirement Watch investment newsletter.

The index is updated quarterly to incorporate factors such as price momentum, earnings momentum, quality, management action and value. The fund’s turnover ratio is more than 200%, Carlson counseled.

About 49% of the fund is in its 10 largest positions. Top holdings recently were Electronic Arts (NASDAQ: EA), Forinet (NASDAQ: FTNT), Activision Blizzard (NASDAQ: AITI), Cadence Design Systems (NASDAQ: CDNS) and The Trade Desk (NASDAQ: TTD).

PSJ lost 27.73% in 2022 but is up 18.09% so far in 2023, 25.33% in the last 12 months, 12.26% in the past three months and 9.79% in last one month. The fund also offers a modest dividend yield of 2.0%.

Chart courtesy of www.stockcharts.com

Four Artificial Intelligence Funds to Purchase For Income and Growth: AIQ

Prognosticators suggest the global artificial intelligence market could increase tenfold from $30 billion in 2020 to $300 billion by 2026, according to officials with Global X Artificial Intelligence & Tech (AIQ). The fund pays a modest dividend yield of just .16% but mainly is aimed at providing investment results that correspond generally to the price and yield performance, before fees and expenses, of the Indxx Artificial Intelligence and Big Data Index.

Global X artificial Intelligence & Tech (AIQ) is intended to invest in companies that potentially stand to benefit from the further development and utilization of artificial intelligence technology in their products and services, as well as in companies that provide hardware facilitating the use of AI for the analysis of big data. AIQ invests without regard to sector or geography, giving it free reign to put its resources wherever its managers want to capture the best returns.

The fund, brought to my attention by Jim Woods, a technology savvy stock picker who heads the Bullseye Stock Trader advisory service, has $324.90 million in net assets and 86 holdings. Its net asset value is $28.40 per share, while its expense ratio is 0.68%.

Paul Dykewicz meets with Jim Woods, head of Bullseye Stock Trader.

The top five holdings for AIQ feature some of the top technology stocks in the world that also have roles in the artificial intelligence arena. Those holdings and their respective weightings in the fund are Nvidia Corp., 5.29%; Meta Platforms Inc. (NASDAQ: META); 4.68%; Tesla Inc., 4.24%; Microsoft, 3.42%; and Oracle Corp., 3.39%.

LRNZ Is Non-Dividend-paying Rival to Four Artificial Intelligence Funds to Purchase

The non-dividend-paying TrueShares Technology, AI & Deep Learning ETF (LRNZ) is the easiest way to gain a broad allocation to some of the best stocks in the AI space, said Jim Woods, who also heads the Intelligence Report investment newsletter, along with the Bullseye Stock Trader advisory service that offers both stock and option recommendations. As an actively managed exchange-traded fund, LRNZ centers its portfolio of global stocks on the development and use of AI and deep learning technologies. The fund holds 20-30 mostly large-cap stocks at a time, all of which either derive at least half of their revenue from AI or have a competitive advantage in the technology.

“When a tech wave like this is roaring into shore, it behooves investors to jump on it early, and LRNZ is the way to do it,” Woods told me.

Woods has amassed a quick track record of success in recommending profitable stock and option trades in artificial intelligence companies. For example, he recently reaped rewards from the rapid rise of C3.ai Inc. (NYSE: AI) and Rambus. He produced a 167.20% gain on AI July 21 $25 call options in just 31 days. Woods also achieved an 83.10% profit in RMBS Aug. 18 $50 call options in only 13 days. Both recommendations came in his High Velocity Options trading service. That service only recommends options aimed at producing quick profits.

Technology Delivers Rewards for Investors This Year

For most of 2023, stocks in the technology, and particularly, the mega-cap technology sector, have seen the lion’s share of money flows, Woods wrote in the June 9 issue of his weekly Intelligence Report hotline. In addition, small-capitalization and energy stocks also recently have been gaining investor interest, he added.

“Money always flows to where it’s treated best; however, what we also know is that markets are a forward-looking pricing machine,” Woods wrote. “The move into sectors such as small caps and energy suggests that the market thinks the economy is going to continue to grow, and that there will be widespread upside in the market and not just a concentration of money going into mega-cap tech.”

Treasury yields and the dollar have declined on the idea of a dovish Fed pivot that pushed money into super-cap tech stocks, while most sectors and stocks went nowhere or declined, Woods added.

Further Fed Rates Hikes May Cause Technology Uptrend to Falter, Connell Cautions

“When the Federal Reserve stops ratcheting up interest rates, I would expect strong growth stories to continue to profit,” said Michelle Connell, who heads the Dallas-based Portia Capital Management. On the other hand, forecasts that the Fed may raise rates further later this year warrant caution for technology investors, if those increases occur, Connell cautioned

Michelle Connell heads Portia Capital Management.

Avoid overpaying by dollar-cost averaging and purchasing shares amid pullbacks, Connell counseled.

Russia’s February 2022 Invasion of Ukraine Faces a Counteroffensive

Russia’s invasion of Ukraine began in February 2022 and has been met with fierce resistance by defenders of freedom in the neighboring nation. The humanitarian fallout caused by Russia’s invasion continues to grow.

One recent example is the June 6 explosion that caused heavy damage to the Kakhovka Hydroelectric Power Plant dam, forcing emergency evacuations to sections of Ukraine’s southern region near the port city of Kherson. Ukraine President Volodymyr Zelensky and other officials posted photos and videos showing a huge surge of water flowing from the damaged structure, putting thousands of residents downstream at risk. Ukrainian leaders blame damage to the dam on Russia. However, Russian leaders are accusing Ukrainians of setting off the catastrophic explosion to their own vital infrastructure.

Observers indicated the dam and the road across it presented a possible line of attack for Ukrainian forces seeking ways to keep Russian forces off-balance. Military experts told the BBC it is highly likely that Russian forces, which controlled the dam, opted to blow it up, blocking a possible Ukrainian military operation.

Meanwhile, Ukrainian military officials said Russia keeps carrying out deadly missile strikes and air strikes. Ukraine continues trying to repel Russian ground assaults, its officials added.

Increased Ukrainian attempts to stage an effective counteroffensive to push back invading Russian forces are expected in the weeks and months ahead. Investors need to be mindful of the political risk wars can put on nearby countries, as well as the disruption of exports and imports of goods from both nations embroiled in conflict.

Nonetheless, the four artificial intelligence funds to purchase for income and growth bring a big opportunity to boost personal portfolios amid the current technology bull market.

Paul Dykewicz, www.pauldykewicz.com, is an award-winning journalist who has written for Dow Jones, the Wall Street Journal, Investor’s Business Daily, USA Today, the Journal omf Commerce, Crain Communications, Seeking Alpha, Guru Focus and other publications and websites. Paul can be followed on Twitter @PaulDykewicz, and is the editor and a columnist at StockInvestor.com and DividendInvestor.com. He also serves as editorial director of Eagle Financial Publications in Washington, D.C. In that role, he edits monthly investment newsletters, time-sensitive trading alerts, free weekly e-letters and other reports. Previously, Paul served as business editor and a columnist at Baltimore’s Daily Record newspaper and as a reporter at the Baltimore Business Journal. Plus, Paul is the author of an inspirational book, “Holy Smokes! Golden Guidance from Notre Dame’s Championship Chaplain,” with a foreword by former national championship-winning football coach Lou Holtz. The uplifting book is endorsed by Joe Montana, Joe Theismann, Ara Parseghian, “Rocket” Ismail, Reggie Brooks, Dick Vitale and many other sports figures. To buy signed and specially dedicated copies, call 202-677-4457.