From Nasdaq: 2024-07-29 13:00:00

After a two-day slump, the Nasdaq 100 ETF QQQ rose 1% due to worries over AI investments. Alphabet Inc.’s GOOGL earnings report caused the tech downturn. Tesla Inc.’s TSLA also dropped post-earnings. Big techs like NVIDIA Corp. NVDA suffered. Microsoft, Apple, Amazon, Meta, and Microsoft are making strategic moves in AI. The future profitability of AI investments remains uncertain.
While many fear a delay in ROI for big tech’s AI capex, Microsoft’s capex on generative AI is expected to reach $23 billion by fiscal 2027. McKinsey reports 39% of firms saw cost savings from AI implementation. Despite high valuations, the ongoing AI revolution could lead to increased demand for AI tools.
AI investments by tech giants like NVIDIA, Alphabet, and Microsoft are on the rise. NVIDIA’s forward P/E is at 42.1X, while Alphabet trades at 22X. Microsoft is at 32.3X. Apple, Amazon, and Meta also showcase varying valuations. Both risk and opportunity lie in choosing the right AI stocks for investment.
Not all big techs are seeing the same success with AI investments. Microsoft-backed OpenAI is challenging Google with SearchGPT. Investors can opt for ETFs like Roundhill Magnificent Seven ETF MAGS to gain exposure to top tech stocks. Other ETFs include XLG, MGK, and QQQ for diversified investment options. The ETF approach can provide a balanced exposure to the “Mag 7” tech giants.



Read more at Nasdaq: Should You Buy the Dip in “Mag 7” and Big Tech ETFs?