Industrial and infrastructure stocks may soon receive the same attention as artificial intelligence trading.
According to Mike Atkins of ETF Action, a bullish setup is taking shape due to both policy and consumer trends. His prediction comes during a volatile month for Big Tech and AI stocks.
“We're seeing some kind of legacy infrastructure and industrial products that haven't done very well over the years,” the firm's founding partner told CNBC's “ETF Edge” this week. “But there's a big push away from globalization and towards this concept of reshoring, and I think it's working.”
Global X CEO Ryan O'Connor is also optimistic given the group's support for the AI boom. his company is Global X US Infrastructure Development ETF (PAVE)tracks companies involved in construction and industrial projects.
“Infrastructure is near and dear to our company, based on PAVE, our largest ETF on the market,” O'Connor said in the same interview. “We think there are some interesting reshoring efforts that can be implemented through these infrastructure locations.”
Global X Infrastructure Exchange Traded Fund is up 16% since the beginning of the year; VanEck Semiconductor ETF (SMH)which includes leading AI Nvidia, taiwan semiconductor and broadcom, It was up 42% as of Friday's close.
Both ETFs are down so far this month, but the Global X Infrastructure ETF has performed better. According to the company's website, the company's top holdings are as follows: howmet aerospace, quanta service and Parker Hannifin.
Supporting the AI boom
He also sees electrification as a positive driver.
“This AI boom, everything we need to continue to support the electrification of the U.S. economy, is definitely one of them,” he said, noting that his firm's American Electrification ETF (ZAP) gives investors exposure to them. The ETF is up about 24% since the beginning of the year.
The Global X US Electrification ETF also performed several percentage points better than the VanEck Semiconductor ETF over the same month.