ZACKSยท2025-11-06 14:30Core Insights - The U.S. Department of Energy has established a significant public-private partnership with Nvidia and Oracle to develop the Solstice AI supercomputers, marking a new collaborative model for technology deployment in critical sectors like energy and security [1] - This partnership reflects the ongoing AI boom, benefiting major tech stocks such as Nvidia and Oracle, which are well-positioned to meet the increasing demand for AI capabilities [2] - The collaboration is expected to drive growth in technology-focused exchange-traded funds (ETFs) that include Nvidia and Oracle, as these companies are projected to thrive amid the AI expansion [3] Nvidia and Oracle's AI Strategy - A McKinsey survey indicates that 88% of organizations are using AI in at least one business function, up from 78% the previous year, suggesting that the current AI growth is just the beginning [4] - Goldman Sachs estimates that widespread AI adoption could contribute an additional $20 trillion to the U.S. economy, necessitating substantial computing power, which Nvidia and Oracle are positioned to provide [5] - Nvidia is leveraging its GPU technology, while Oracle is expanding its cloud infrastructure to support AI demands [6] Investment Commitments - Oracle has committed $300 billion over five years in an AI infrastructure partnership with OpenAI, leading to a nearly 360% year-over-year increase in its remaining performance obligations [7] - Nvidia plans to invest up to $100 billion in OpenAI to develop infrastructure and data centers with a capacity of at least 10 gigawatts [8] Growth Potential for Tech ETFs - The convergence of AI adoption, corporate investment, and government involvement is setting the stage for significant growth in technology ETFs, particularly those with substantial holdings in Nvidia and Oracle [9] - The direct growth of these companies from AI advancements is expected to positively impact the ETFs that include their stocks, presenting a favorable opportunity for investors [10] ETF Performance Overview - Vanguard Information Technology ETF (VGT): Net assets of $119 billion, with Nvidia at 17.15% and Oracle at 2.34% weightage; year-to-date surge of 25.5% [12] - Fidelity MSCI Information Technology Index ETF (FTEC): Net assets of $17.41 billion, with Nvidia at 17.61% and Oracle at 2.02% weightage; year-to-date increase of 25.8% [13] - Technology Select Sector SPDR ETF (XLK): Assets worth $95.1 billion, with Nvidia at 15.18% and Oracle at 3.11% weightage; year-to-date growth of 27.5% [14][15] - Pacer Data and Digital Revolution ETF (TRFK): Net assets of $308.3 million, with Nvidia at 9.25% and Oracle at 8.67% weightage; year-to-date rise of 40.7% [16]