WTAI ETF

October has a reputation for being a calamitous for stocks. And it's been the month in which some of the worst market crashes on record were born.

Shares of Nvidia (NVDA) are down a staggering 17.22% for the week ending Sept. 4. That decline is made all the worse when considering U.S. markets were closed on Monday in observance of the Labor Day holiday.

Even with some improvement in recent days, the Nasdaq-100 Index (NDX) is lower by 6.77% for the month ending Aug. 12. That is to say technology stocks, including names with AI ties, have retreated as of late.

With the Nasdaq-100 Index (NDX) lower by 12.66% for the month ending Aug. 7 and 13.65% below its 52-week high, it might not yet be safe for investors to rush back to mega-cap growth stocks, including those with artificial intelligence (AI).

In the early innings of 3Q 2024, there's evidence of a rotation out of previously beloved mega-cap growth stocks into value and small-cap equities. Many of those stocks have ties to the AI megatrend.

The WisdomTree Artificial Intelligence and Innovation Fund ETF is underperforming the S&P500, Nasdaq, and the tech sector. WTAI's stock selection methodology focuses on stocks with revenues derived from either AI or innovative activities. AI revenues are limited mostly to semiconductor stocks.

Investors of all stripes are getting increasingly acquainted with the artificial intelligence (AI) megatrend. Still, many market participants that are new to the theme may not realize the depth found with the related investment thesis.

To this point in the evolution of the artificial intelligence (AI) investment thesis, a small number of mega-cap stocks have emerged as viable names. As a result, market values on those stocks have ballooned.

As artificial intelligence (AI) has evolved from the enablers phase to the adopters phase. And investors are right to ponder which industries make for credible, long-term buyers of AI services and technologies.