Are you ready to capitalize on the artificial intelligence boom in the investing world? Bank of America suggests looking at the fundamental building blocks of the economy for potential opportunities. Investors and ETF strategist, Jared Woodard, points out that some sectors are currently underappreciated when it comes to the energy demand created by AI programs.
While data centers, hyperscalers, and chip makers have already seen significant growth, Woodard believes that further investments in these areas should be contingent on a realistic plan to expand the power supply. This means that the traditional sectors of the economy may need to step up before the digital darlings can truly shine.
Interestingly, utility stocks have started to rally in May, with the Utilities Select Sector SPDR Fund (XLU) up 8% month-to-date. This suggests that investors are beginning to recognize the increasing energy demand and the potential opportunities in the utility sector.
Woodard also highlights other potential winners, such as the Direxion Auspice Broad Commodity Strategy ETF (COM), which offers exposure to a variety of commodities. Additionally, Bank of America has a buy rating on mining stock Freeport-McMoRan, citing expectations of deficits in metals like copper through 2026.
Furthermore, companies involved in energy production, such as those in the oil services sector and uranium mining, could also see growth. The VanEck Oil Services ETF (OIH) and Global X Uranium ETF (URA) are two options Woodard mentions as potential beneficiaries of the increasing energy consumption trend.
At Extreme Investor Network, we agree that staying ahead of emerging trends in the investing world is key to maximizing returns. By exploring investment opportunities in sectors that are often overlooked but play a crucial role in the new economy, investors can position themselves for success in the era of artificial intelligence and increasing energy demand.
Stay tuned to our platform for more insights and recommendations on how to navigate the ever-evolving landscape of investing. Join us on Extreme Investor Network and take your investment journey to the next level.