Long term, they are positioned to gain more of a foothold in the AI space. They are extremely important within this ecosystem because they also have significant market share. It's enabling all of these AI startups to access the technology on a public cloud basis."Īdvanced Micro Devices (AMD) is another company that provides GPUs. "All of the large internet players out there are spending a lot on their hardware and they're also putting that hardware into their public cloud infrastructure. "They just have a very significant economic moat in what is now an extremely hot and competitive area," Tauber said. Furthermore, Nvidia continues to add new ways to make their products easier to write specific applications on. They have a "tremendous" market share in AI applications, and companies are hungry for their products, he noted. They also have built a software architecture on top of the hardware which makes it easy for developers to create applications using their hardware. But at least two decades ago, the company began to develop that same technology for high-performance computing and AI, he said. Nvidia (NVDA) provides graphics processing units (GPUs), which were originally used for high-performance video games. The companies listed below are based on the top 10 weighted stocks from the ETF. And these new developments could fundamentally shift the way in which even their competitors operate. Tauber said the ETF includes companies that are gaining market share from their competitors because of the research, developments, and technology they're bringing to their industries. Those who choose to bet on this sector should also have a longer time horizon, at minimum, between three to five years, he noted. "It's sort of future-proofing your asset allocation by trying to invest in companies that are building the future," Tauber said. Overall, investing in disruption should be seen as a form of exposure to aggressive growth while understanding the increased level of volatility that comes with this class. For example, a few years ago, 3D printing was the exciting new invention everyone was talking about, but it wouldn't have been appropriate to create an ETF just focused on the promise of that printing technology because, in the long term, it would have been overvalued, he said. This diversified exposure avoids getting caught up in the hype which could end up being short-lived, he noted. The fund's approach is to remain flexible enough to move across various sectors rather than stick with one type of technology. These two together are really transformational, he said.įor this reason, instead of taking the approach of creating something as narrow as an AI ETF, the ETF is focused on anything that signals disruption to an entire industry and changes the status quo. If you have an idea, you can create and scale a company very quickly because of your ability to reach the end user and your access to computing power. Then, you have public cloud infrastructure that connects it all together, such as Amazon Web Services or the Google Compute Engine which provides infrastructure as a service (IaaS). The first one is very simple: almost everyone is walking around with a mobile phone, which is pretty much a supercomputer that's connected to service providers. There are two key elements that make up the infrastructure. At the center of all this change is an underlying infrastructure that ties all these technologies together, says Jason Tauber, the portfolio manager who runs the Neuberger Berman Disrupters ETF (NBDS). But it's only a sliver of what's to come in a rapidly evolving world. Investors should be ready for volatility and be able to hold for at least three to five years.Īrtificial intelligence has dominated the conversation when it comes to new technology that has captured the public's imagination, and that's thanks to user-friendly applications like ChatGPT.ĪI can be placed under the broad category of disruptive technology, which refers to innovations that change consumers' habits and displace old markets.Investing in disruptive technology is like future-proofing your asset allocation, he added.Mobile phones and cloud services make up the infrastructure for disruption, says Jason Tauber.Account icon An icon in the shape of a person's head and shoulders.
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