Photo by Steve Johnson on Unsplash

An Introduction

The increase in the number of categories declining period after period (no category went down in February, 3 went down in March, 6 went down the week before last, all 7 categories went down last week and again this week) clearly indicates that the surge in the AI sector that began back on October 31st is, indeed, over. The Global X Artificial Intelligence & Technology ETF (AIQ) of 91 constituents - which best reflects the AI sector as a whole - seconds that fact, having gone up 8.4% in February, just up 2.0% in March, down 0.1% the week before last, down 1.6% last week and has gone down 5.7% this week..

7 AI Categories Compared

Below is how each category performed, in descending order this week along with a description of what makes up each category, the stocks included in each category, those stocks in each category that went up (none did) or down by 5% or more during the week, and commentary on those stocks that made significant moves this week, where available.

1. AI-enabled Personal Computer Category: down 1.5% this week
   • Description: A computing revolution is beginning as a result of the introduction of neural processing units in the latest chip designs which will result in a coming decade of growth in PC upgrades and innovation. This portfolio tracks the stock performances of the companies that have introduced, or plan to introduce, AI-enabled PCs in 2024.
   • 4 Constituents:
   • HPQ, MSI, LNVGY, and DELL
   • Articles: NA
2. Cybersecurity Software Category: down 4.6% this week
   • Description: Given the anticipated 14% increase in spending on cyber security in 2024, this portfolio tracks the performance of the largest cyber security software stocks expected to realize sizable returns again in 2024.
   • 10 Constituents:
   • QLYS, VRNS, PANW, CHKP, FTNT, CYBR (-5.9%), ZS (-6.7%), TENB, (7.6%), S (-7.7%), and CRWD (-8.5%).
   • Articles:
     • 6 Cybersecurity Stocks to Buy Now
3. Quantum Computing Category: down 5.2% this week
   • Description: Quantum computing is still years away but it will change the world when it arrives and, as such, it is important to keep abreast of the major companies involved in its research and development and this portfolio does just that.
   • 9 Constituents: HON, QBTS, INTC, BIDU, IBM, RGTI (-6.8%), AMD (-11.4%), IONQ (-11.7%), and MU (-12.9%).
   • Articles:
     • Micron (MU) says Taiwan earthquake will impact on DRAM (dynamic random-access memory) supply
4. Cloud Computing SaaS Category: down 5.6% this week
   • Description: Given the dramatic 37.3% CAGR forecast of the AI market between now and 2030, the 18.5% surge in the amount being spent on cloud computing SaaS and the major annual rental rate increases of data centers (18.5% in 2023) expected in the future, should greatly benefit the data center industry.
   • 8 Constituents: WDAY, INTU, ADBE, SHOP, NOW (7.1%), TEAM (-7.3%), SNOW (-8.3%), CRWD (-8.5%), and ADSK (-8.6%).
   • Articles:
     • Lost Money on Snowflake Inc.(SNOW)? Join Class Action Suit Seeking Recovery
     • Autodesk (ADSK) provides update on delayed Form 10-K filing
5. Custom Design EDA Software Category: down 7.0% this week
   • • • Description: The stock prices of electronic design automation (EDA) software companies creating custom designed chips is set to take off given a projected 11% CAGR in the category between now and 2028. This portfolio tracks the stock price changes of 3 companies in this category.
       •  3 Constituents:  ANSS, SNPS (-8.3%) which is acquiring ANSS, and CDNS (-8.4%).
       • Articles: None
6. Semiconductor (Chip) Category: down 10.3% this week
   • Description:  The price of AI chip stocks surged by 64% in 2023 and many analysts think there is an excellent chance that the boom will continue in 2024 and this portfolio tracks the stock performances of the major players in this category.
   • 15 Constituents: KLAC (-7.7%), QCOM (-8.0%), ENTG (-8.0%), AMAT (-8.7%), LRCX (-9.1%), MPWR (-10.1%), AMD (-10.2%), ATEYY (-10.3%), TSM (-10.4%), AVGO (-10.4%), ASML (-10.6%), MRVL (-11.4%), MKSI (-11.8%), MU (12.9%), and NVDA (-13.6%).
     • Article:
       • AMD’s stock has been ‘in absolute freefall’ — but its earnings could spark a chip-sector rebound
       • TSM stock slides following Q1 earnings on industry caution from management
       • Can Marvell (MRVL) Compete With Nvidia?
       • Nvidia (NVDA) stock drops as chips industry moves into correction phase
7. AI-Powered Drug Discovery Category: down 11.0% this week
   • Description: AI-powered drug discovery holds massive potential to increase the accessibility of drugs and to treat presently incurable conditions and this portfolio highlights the most prominent clinical-stage biopharma tech companies using AI to power their research and development.
   • 6 Constituents: SDGR (-8.2%), EXAI  (-9.0%), ABCL (-10.8%), RXRX (-12.6%), RLAY (-15.2), and ABSI (-18.2%).
   • Articles: None

Summary

The above analysis covers 54 different stocks and all 54 went down in price this week (-8.4%, on average) vs. 47 last week.

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