"If the AI rally continues this year, I expect it to return to its roots. AI investors poured into hardware companies early on before coalescing into software companies and driving up broader tech valuations to nosebleed levels. This year, I expect hardware stocks to outperform their software counterparts. Money is moving from hyperscalers into the AI buildout, not the other way around. AI models are yet to generate profits, so for 2026, AI hardware companies are still the best picks."
"The First Trust Nasdaq Semiconductor ETF is an ETF that tracks the Nasdaq Smart Semiconductor Index. It gives you exposure to certain companies in the semiconductor sector by weighting them based on financial factors instead of market capitalization. I like it because it is the only major chip ETF with as its largest holding. If you've been keeping tabs on the components that are seeing explosive price increases, you're likely aware that memory prices have doubled or more in a matter of months. Higher-end RAM kits have quintupled in price."
Growth investing has shifted toward AI-driven gains, with hardware and semiconductor companies capturing much of the upside. First Trust Nasdaq Semiconductor ETF (FTXL) tracks the Nasdaq Smart Semiconductor Index and weights holdings by financial factors rather than market capitalization. Memory prices have surged—doubling or more in months and with higher-end RAM kits up fivefold—and memory and chip demand is projected through 2028. FTXL rose 56% over the past year and carries a 0.60% expense ratio. Recommended satellite ETFs include Procure Space ETF (UFO) and iShares US Aerospace & Defense ETF (ITA) for exposure beyond core AI software names.
Read at 24/7 Wall St.
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