Stock Market Surge: AI Leads the Charge in Recovery

Recent charts illustrate a remarkable rise in the stock market, especially the S&P 500, which has rebounded nearly 20% over the last month, nearly offsetting all losses from the trade war. This resurgence ranks among the most substantial comeback rallies in market history.

Driving this momentum are AI stocks. The Global X Artificial Intelligence ETF (AIQ) has gained more than 25% in just one month.

This rally appears to have momentum. Many analysts predict stocks will continue to rise through the summer, with AI stocks playing a pivotal role in this trend. However, investing directly in the AIQ ETF may not be your best option.

To aid investors, we have created proprietary AI stock indices, featuring what we view as the top performers in the AI megatrend: the AI Builders 15 and AI Appliers 15.

While these indices are still being refined, initial results show substantial promise. The AI Appliers 15 index is up nearly 40% since early April, while the AI Builders 15 index has outperformed with a rise of over 45%.

These indices are leading the Wall Street rebound and are expected to maintain this trajectory for the foreseeable future.

Exploring the AI Builders 15: Key Players in AI Infrastructure

The AI Builders 15 index consists of the top 15 companies essential for constructing the infrastructure powering the AI revolution. These firms function like the ‘picks and shovels’ of the AI Gold Rush. Rather than developing software, they provide the necessary components like data centers, processors, cooling technology, and energy solutions.

Included in this group are:

• Chipmakers such as Nvidia (NVDA), whose GPUs are crucial for this digital transition.
• Chip designers like Arm (ARM), whose architectures form the backbone of modern AI computing.
• Energy providers such as Constellation Energy (CEG), ensuring power for AI server farms.
• Cooling technology firms like Vertiv (VRT), which deliver thermal solutions vital for AI technology.

These companies represent the essential foundation of AI infrastructure. As the Nasdaq has risen approximately 92% since the AI boom began in late 2022, and the broader chip sector noted around an 80% increase, our preliminary AI Builders 15 index has outperformed both significantly, up over 240%.

This translates to a 2.6X gain over the Nasdaq and a 3X return compared to the semiconductor sector.

This group is thriving because tech companies, governments, and large organizations continue to invest hundreds of billions of dollars into AI infrastructure.

AI Appliers 15: Innovators Shaping the Future

While the Builders lay the groundwork, the AI Appliers 15 are focused on transforming applications to create more intelligent solutions.

This index highlights 15 leading companies utilizing AI to redefine everyday tasks, enhancing how we learn, work, and interact.

Examples include:

• Palantir (PLTR), whose AI software aids organizations in various sectors, including healthcare and supply chain management.
• Duolingo (DUOL), which revolutionizes education through real-time machine learning adaptations for language learners.
• AppLovin (APP), optimizing advertising and gaming through AI-based analytics.

These companies are crucial in creating innovative experiences, clearly demonstrating their market strength.

Since the onset of the AI boom in late 2022, software stocks represented by the iShares Expanded Tech-Software ETF (IGV) have increased by around 100%. The Nasdaq is up 92% during this period. In contrast, our early-stage AI Appliers 15 index has surged over 285%. This signifies a return three times greater than software stocks and more than three times the gain of the Nasdaq.

The AI Appliers 15 are effectively exemplifying the real-world impact of artificial intelligence, offering tangible value across various industries. An array of applications, including AI legal consultants, healthcare diagnostics, and automated content creation, showcases how these companies are monetizing AI while driving industry transformation.