CRM - FTEC: Software-Related Risks Emerge As Gen AI Disrupts
2024-06-09 09:45:29 ET
Summary
- Fidelity MSCI Information Technology Index ETF has seen nearly a 33% upside over the past year.
- Valuations for certain chip stocks have become expensive, but there are still opportunities for growth in the AI space.
- However, risks have emerged for Application Software companies due to the disruptive nature of Gen AI, making it not the appropriate time to invest in the ETF.
- There are also interest rate-related risks.
Trading at around $163 at the time of writing, the shares of the Fidelity MSCI Information Technology Index ETF ( FTEC ) have appreciated by 32.73% over the last year as charted below. This has been largely possible because its top holdings have benefited from the AI enthusiasm, but, after such a performance, it becomes important to assess whether the momentum can continue....
FTEC: Software-Related Risks Emerge As Gen AI Disrupts