Investors have been able to enjoy huge gains from artificial intelligence (AI) stocks. We're still in the early innings, though, and that means opportunities are still available.Artificial intelligence (AI) stocks led by the megacap tech and "Magnificent Seven" names powered the market higher in 2025. As companies ramp up their AI development budgets and spend tens of billions of dollars trying to position themselves as leaders in the race, funds focused on this sector remain the ETFs to consider buying in ...

Core Viewpoint - CNBC host Jim Cramer endorses a J.P. Morgan report indicating that physical and financial constraints, rather than a market crash, will limit tech giants' spending on artificial intelligence (AI) [1] Group 1: Physical Constraints - Cramer argues that fears of an AI bubble similar to the dot-com era lack nuance, with "electric power gating" being the main factor preventing overspending by hyperscalers [2] - The J.P. Morgan report highlights U.S. power generation constraints as a significant risk for the AI sector, with data centers expected to drive two-thirds of U.S. load growth while only adding 25 GW of reliable capacity in 2024 [3] - This scarcity of electricity acts as a hard cap on the speed at which companies can deploy new infrastructure, effectively limiting their capital expenditures [3] Group 2: Financial Constraints - Major players like OpenAI will face balance sheet constraints, with the J.P. Morgan report noting substantial financial commitments that may exceed current revenues [3] - OpenAI has committed to pay Oracle Corp. $60 billion per year for compute facilities that are not yet built, highlighting the financial strain [3] - OpenAI's commitments to corporate partners total $1.4 trillion, while its revenue primarily comes from subscription fees, making profitability a significant challenge [4] Group 3: Market Dynamics - Cramer suggests that tangible constraints on power and capital will slow AI spending, preventing the speculative behavior seen during the 2000 market bubble [4] - The J.P. Morgan report contrasts today's market with the dot-com bubble, noting that current high valuations are supported by high profit margins, with 42 AI-related companies contributing up to 75% of S&P 500 earnings growth since late 2022 [7] - A shift in financing is occurring, with companies like Meta Platforms and Oracle increasingly relying on debt markets for data center expansions, indicating a new discipline in capital management [8][9]

Core Insights - Venture capitalist Chamath Palihapitiya warns that the "Stop AI" movement is gaining traction not due to its radical nature, but because it resonates with an increasingly pressured American public [1][3] Group 1: Industry Perception and Challenges - Palihapitiya identifies a significant "perception issue" within the tech industry, suggesting that if leaders do not shift focus from stock market wealth to public benefits, progress may be jeopardized [2] - There exists a disconnect between Wall Street and Main Street, where while Big Tech celebrates financial gains, the average American faces rising costs and job insecurity [3] - The AI boom benefits a small elite, while the majority feel threatened by potential job losses and economic instability [4] Group 2: Recommendations for Tech Leaders - Palihapitiya advocates for modern tech leaders to follow the example of Gilded Age industrialists, such as Andrew Carnegie, by using their resources to enhance public welfare [5] - He emphasizes the need to cease ostentatious displays of wealth that alienate the public, urging tech moguls to focus on measurable contributions to society [5] Group 3: Political Implications - The political landscape regarding AI is becoming increasingly contentious, with figures like Senator Bernie Sanders criticizing "Big Tech Oligarchs" for their influence in politics [6] - Palihapitiya warns that without a "social dividend" from the tech industry, populist movements may lead to restrictive legislation against AI advancements [6] Group 4: Investment Opportunities - A list of AI-linked ETFs is provided for investors, showcasing various funds with year-to-date and one-year performance metrics [7][8][9]

Core Viewpoint - The narrative that artificial intelligence (AI) poses a threat to the American workforce is rejected, with new data indicating that AI is a significant driver of hiring and wage increases [1][2]. Group 1: AI's Impact on Employment - Occupations with high exposure to AI automation are outperforming the rest of the labor market, with job growth in these roles at 1.7%, more than double the 0.8% growth seen in all other occupations [8]. - Real wages for AI-exposed roles increased by 3.8%, compared to a modest 0.7% rise for other workers, highlighting the positive impact of AI on compensation [8]. Group 2: Broader Labor Market Context - The U.S. labor market is showing signs of strain, with the unemployment rate rising to 4.6%, the highest level since September 2021, and private-sector hiring remaining sluggish with only 69,000 jobs added [5]. - The current environment has been described as a "hiring recession," with 710,000 more unemployed Americans than a year ago, attributed to factors including tariffs, corporate cost-cutting, and AI adoption [6]. Group 3: Policy Implications - The commentary from the White House AI and Crypto Czar aligns with the broader agenda of the Trump administration, which focuses on deregulation and maintaining global tech dominance [4].

Group 1 - The core viewpoint is that artificial intelligence (AI) is on track to become the most significant technological revolution since the internet, and it is still in its early stages [1] - Major companies like Nvidia, Microsoft, OpenAI, and Alphabet are recognized as leaders in AI, but there are numerous potential winners across the sector, including infrastructure builders, enterprise software creators, application developers, and cloud providers [2] - Investing in AI may be more effective by focusing on the overall theme rather than selecting individual stocks, as some of the highest returns have come from the "Magnificent Seven" stocks, although concerns about high valuations and slowing momentum are emerging [3] Group 2 - An ETF that provides exposure to major companies while also exploring additional opportunities may be a strategic approach for investors in 2026 [4] - The Defiance Quantum ETF focuses on quantum computing, which is seen as a technology that could significantly enhance AI capabilities, with applications across various sectors [6] - The top holdings of the Defiance Quantum ETF include Tower Semiconductor, Rigetti Computing, Teradyne, Coherent, and Micron Technology, with Alphabet being the only "Magnificent Seven" stock in the top 10 holdings, indicating good diversification [7]

Core Insights - Quantum computing is emerging as a significant technological advancement, potentially surpassing traditional computing capabilities by utilizing qubits instead of bits [2][4] - The Defiance Quantum ETF offers a diversified investment approach in the quantum computing sector, mitigating risks associated with stock picking in a volatile market [3][6] Group 1: Quantum Computing Potential - Quantum computing significantly enhances traditional computing power, with applications intersecting with AI and cloud computing [2] - The industry is still in its early stages, and while some companies have shown impressive returns, many lack products and revenue, leading to cash burn [5][7] Group 2: Investment Strategy - The Defiance Quantum ETF simplifies investment in quantum computing, providing exposure to both emerging quantum companies and established tech leaders like Advanced Micro Devices and Nvidia [6][7] - The ETF has returned over 387% since its inception, indicating strong performance despite the inherent risks of the sector [7] - The fund employs an equal-weighting strategy across nearly 80 holdings, reducing the risk of overexposure to any single stock [9][10]

Group 1 - Quantum computing represents a significant advancement over traditional computing, utilizing "qubits" that can exist in multiple states, potentially solving complex problems much faster than conventional computers [2][3] - The market for quantum computing is vast, presenting substantial investment opportunities as the technology is still in its early stages of development [3][4] - The Defiance Quantum ETF offers a diversified investment approach, tracking an index of quantum computing stocks and holding 79 companies in its portfolio, including both start-ups and established tech giants [5][6] Group 2 - The top holding in the Defiance Quantum ETF is Rigetti Computing, which constitutes 3.3% of the fund, indicating a diversified asset allocation [6] - Other significant holdings in the ETF include Advanced Micro Devices, Intel, D-Wave Quantum, and Tower Semiconductor, showcasing a mix of companies involved in quantum computing [6][7] - The ETF has a low expense ratio of 0.40%, making it an attractive option for investors looking to gain exposure to the quantum computing sector [7]

Core Viewpoint - Mohamed El-Erian, chief economic adviser at Allianz, warns that investments in AI-related companies may lead to significant losses, describing the current market as a "rational bubble" with a limited number of winners [1][2]. Group 1: AI Market Dynamics - El-Erian characterizes AI as a "major transformational general purpose technology," similar to electricity, but notes that the current market frenzy is lifting weaker companies alongside a few strong performers [1]. - He emphasizes that the AI boom is rational due to the substantial potential payoffs, but cautions that this will result in a relatively small number of successful companies, leading to inevitable losers [2]. Group 2: Risks Associated with AI - El-Erian identifies four major risks that the U.S. is not managing effectively: the absence of a "diffusion policy" for productivity, the threat posed by "bad actors," the management of the AI bubble, and the focus on labor displacement versus enhancement [3]. - He warns that if the emphasis remains on labor displacement, public support for AI technologies could diminish [3]. Group 3: Market Sentiment and Comparisons - The warning from El-Erian comes amid a broader debate, with figures like Michael Burry suggesting that avoiding investment may be the best strategy, while others liken the current market to a "Dotcom on steroids" [4]. - In contrast, some industry leaders, such as JPMorgan's Jamie Dimon, dismiss bubble concerns, comparing AI's potential to the early days of the internet, while Goldman Sachs defends high valuations based on strong fundamentals [5]. Group 4: Investment Opportunities - A list of AI-linked exchange-traded funds (ETFs) is provided for investors, showcasing their year-to-date and one-year performance, indicating a range of investment options in the AI sector [6][7]. - The market remains volatile, with the S&P 500 showing a year-to-date increase of 16.25% and reaching a new 52-week high, while the tech-heavy Nasdaq 100 experienced a decline of 1.47% recently [7][8].

Core Insights - The Defiance Quantum ETF (NASDAQ: QTUM) combines speculative quantum computing stocks with established tech companies, providing a balanced investment approach in a high-risk sector [2][3][8] - Quantum computing holds significant potential across various industries, but current technology is still in its infancy, akin to classical computing in the 1950s [5][6] - The ETF has gained 38% year-to-date, reflecting growing investor interest, but high valuations in pure-play quantum stocks necessitate caution [9] Group 1: ETF Structure and Strategy - The Defiance Quantum ETF tracks the BlueStar Quantum Computing and Machine Learning Index, consisting of 80 positions with varying degrees of quantum exposure [7] - The fund includes both pure-play quantum companies, such as IonQ and Rigetti Computing, and profitable tech giants like Nvidia and AMD, which are investing in quantum infrastructure [7][8] - This diversification aims to mitigate risks associated with high revenue multiples and cash burn rates of pure-play quantum stocks [8] Group 2: Market Potential and Challenges - Quantum computing has potential applications in drug discovery, financial modeling, artificial intelligence, and cryptography, with markets worth hundreds of billions of dollars [5] - Current quantum computers face significant technical challenges, including the need for near-absolute-zero temperatures and high error rates, making them commercially unproven [6] - The ETF's expense ratio of 0.4% is considered reasonable for thematic exposure, but investors should be aware of the long timeline for commercialization of quantum technology [9]

Core Viewpoint - Economist Justin Wolfers argues that fears of an AI bubble may be overstated, suggesting that the high valuations in the tech sector could be justified by genuine technological advancements [1][2]. Group 1: AI Boom and Market Valuations - Wolfers describes the AI boom as a potential "beautiful industrial revolution," indicating that significant investments align with a real technological shift [1]. - He emphasizes that while the market could be in a bubble, the current valuations may be rational if AI fulfills its potential in automating tasks [2]. - Goldman Sachs supports this view, projecting an $8 trillion opportunity in AI and asserting that current investment levels are sustainable [3]. Group 2: Diverging Perspectives on the Market - There is a stark contrast between bullish and bearish perspectives, with some analysts labeling the market as "Dotcom on steroids," citing deteriorating company fundamentals [3]. - Crescat Capital highlights that top tech stocks are valued 270% higher as a percentage of GDP compared to the dot-com peak, raising concerns about current market conditions [3]. Group 3: Economic Conditions and AI Investment - Wolfers warns against overconfidence in identifying market bubbles, stating that certainty often leads to errors in judgment [2][4]. - He notes that the U.S. economy is effectively operating as "two economies," with the AI boom masking weaknesses in other sectors, suggesting a potential "non-AI recession" without AI-related investments [4]. Group 4: Performance of AI-Linked Stocks and ETFs - The S&P 500 index has gained 13.55% year-to-date, while many AI-linked stocks and ETFs have significantly outperformed the market [5]. - Notable performers include the iShares US Technology ETF with a year-to-date performance of 23.58% and Nvidia Corporation with a 32.47% increase [6][7].