Concerns about high valuations of large semiconductor stocks that have driven the U.S. stock market's rally are increasing, leading more investors to ponder whether to continue investing. The Nasdaq index also appears to be taking a breather after surpassing 20,000 points.
In this context, the securities industry suggested that investors could pursue revenue by making proactive investments in next-generation artificial intelligence (AI) corporations or diversifying into the software sector, which is expected to see growth in performance. Consequently, related exchange-traded funds (ETFs) are being launched one after another.
According to the financial investment sector on the 19th, there are predictions that the AI theme, which has recently led the surge in the U.S. stock market, may shift from a semiconductor focus to the software sector.
Kim Il-hyuk, a Research Institute member at KB Securities, noted, "The profit momentum of semiconductor corporations led by Nvidia began to decline around mid-year, whereas the profit momentum of software is expected to rebound sharply following this year's quarter."
In particular, since the Federal Open Market Committee (FOMC) meeting in September and with the conclusion of the U.S. presidential election, corporations' sentiment towards software investments has improved compared to before. The researcher stated, "Corporations that are directly benefiting from AI technology include ServiceNow and Palantir."
However, it may be burdensome to focus investments on next-generation corporations or emerging software sectors at this moment. In such cases, diversifying through ETFs is an alternative.
Shinhan Asset Management's 'SOL U.S. AI Software' ETF has reportedly risen nearly 40% over seven months since its launch on May 14 this year. This ETF primarily invests in key U.S. AI software corporations. It includes major tech stocks such as Microsoft (MS·17.70%), as well as global B2B (business-to-business) software companies like Salesforce (9.47%), big data analytics platform provider Palantir (8.47%), digital workflow company ServiceNow (7.62%), cybersecurity firm Palo Alto Networks (5.21%), and semiconductor design software company Synopsys (3.64%).
The net worth of this ETF, which stood at 10 billion won at its launch, surged to 150 billion won the previous day. During this period, individual investors purchased the ETF for around 81.3 billion won.
KB Asset Management's 'RISE U.S. AI Tech Active' ETF has also risen 13.25% in about three weeks since its launch on the 26th of last month. This ETF invested half of its portfolio in big tech companies that have led the U.S. stock market, such as Nvidia, Microsoft (MS), and Alphabet (Google), while focusing the other half on discovering next-generation corporations.
Investments are being made in next-generation corporations expected to lead the U.S. stock market, including semiconductor design firm Marvel Technology (6.98%), Palantir (6.73%), ServiceNow (5.85%), and cryptocurrency trading company Coinbase (5.63%).
The net worth of the RISE U.S. AI Tech Active ETF, which was valued at 8 billion won on the day of listing, increased more than threefold to 25 billion won the previous day. During this period, individual investors net purchased about 6.1 billion won worth. A spokesperson for KB Asset Management remarked, "This is a product that can quickly respond to the global AI market while providing investors with new opportunities."
Experts forecast that the upward trend of the U.S. stock market will continue into next year. The U.S.-first policy of the Trump Administration's second term is expected to contribute to the bullish market.
Kang Jae-goo, an analyst at Hanwha Investment & Securities Research Institute, stated, "While semiconductor regulations against China will continue, the revenue proportion from the Chinese market for the U.S. software industry is negligible," and added, "Given that regulations on advanced technologies and equipment in the U.S. are likely to persist next year, the preference for software may rise." Hanwha Investment & Securities projected that corporations in the U.S. software and information technology (IT) services will grow by 14% and 9.4%, respectively, compared to the previous year.