Industrial and infrastructure stocks could soon share the spotlight with the artificial intelligence industry.
According to ETF Action's Mike Atkins, bullish sentiment is emerging due to political and consumer trends. His forecast comes during a volatile month for Big Tech and AI stocks.
“You're seeing kind of old-school infrastructure, industrial products that haven't performed so well over the years,” the company's founding partner told CNBC's “ETF Edge” this week. “But there's a big trend … away from globalization toward this reshoring concept, and I think that's successful.”
Global-X CEO Ryan O'Connor is also optimistic because corporations are supporting the AI boom. His company runs it Global X US Infrastructure Development ETF (PAVE)the company pursues that are involved in construction and industrial projects.
“Infrastructure is very important to us based on PAVE, our largest ETF in the market,” O'Connor said in the same interview. “We think some of these reshoring efforts that can be accomplished through some of these infrastructure locations are interesting.”
Infrastructure exchange-traded fund Global X is up 16% so far this year, during the VanEck Semiconductor ETF (SMH)which also includes AI pioneers Nvidia, Taiwan Semiconductor And Broadcom, is up 42% since Friday's close.
Both ETFs are lower so far this month – but Global X's infrastructure ETF is doing better. According to the company's website, these are its largest holdings Howmet Aerospace, Quanta Services And Parker Hannifin.
Supporting the AI boom
He also sees electrification as a positive driver.
“All of the things that are going to be necessary for us to continue to support this AI boom and the electrification of the U.S. economy are certainly part of it,” he said, noting that the company's U.S. Electrification ETF (ZAP) gives investors access to it. 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 this month.