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An Introduction

Regular readers of my weekly articles on the performance of some the 9 different artificial intelligence stock categories may find it difficult to compare each relative to each other so this article is a synopsis of the performances of each of those categories last week, in descending order, and YTD along with a description of what makes up each category and the stocks included in each.

1. AI-Powered Drug Discovery Stocks Index: UP 18.0% last week; UP 1.9% YTD
   • Description: With the promise of lower costs and shorter development timelines, AI-powered drug discovery holds massive potential to increase the accessibility of drugs and to treat presently incurable conditions. This Index highlights the most prominent clinical-stage biopharma tech companies using AI to power their research and development.
   • 8 Constituents: ABCL, ABSI, BTAI, EXAI, LTRN, RLAY, RXRX and SDGR. 
2. Quantum Computing Stocks Index: UP 0.2% last week; UP 1.7% YTD 
   • 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 Index does just that.
   • 9 Constituents: AMD, BIDU, HON, IBM, INTC, IONQ, MU, QBTS and RGTI
3. Cyber Security Software Stocks Index: DOWN 0.3% last week; UP 14.3% YTD
   • Description: Given the anticipated 14% increase in spending on cyber security in 2024, this Index tracks the performance of the largest cyber security software stocks which were UP 106%, on average, and are expected to realize sizable returns again in 2024.
   • 10 Constituents: CHKP, CRWD, CYBR, FTNT, PANW, QLYS, S, TENB, VRNS and ZS.
4. Semiconductor (Chip) Stocks Index: DOWN 0.5% last week; UP 18.6% YTD
   • Description:  The price of AI chip stocks surged by 64% in 2023 and many analysts think there is an excellent chance that the chip boom will continue in 2024 and this Index tracks the stock performances of the major players in this category.
   • 15 Constituents: ATEYY, AMAT, AMD, ASML, AVGO, ENTG, KLAC, LRCX, MKSI, MPWR, MRKL, MU, NVDA, QCOM and TSM.
5. Best Value AI Stocks Index: DOWN 1.7% last week; UP 16.7% YTD
   • Description: This Index identifies and tracks those AI stocks that still exhibit more room to run in 2024 based on their current excellent Price-to-Earnings (1-year) Growth (PEG) Ratio valuation metrics.
   • 8 Constituents: AMD, AVGO, CRM, DELL, NVDA, PATH, PLTR and TEAM.
6. AI-enabled PC Stocks Index: DOWN 2.5% last week; UP 1.6% YTD
   • Description: A computing revolution is coming with AI-enabled PCs kicking off a decade of growth in PC upgrades and innovation as a result of the introduction of neural processing units in the latest chip designs. This Index tracks the stock performances of those companies that have introduced, or plan to introduce, AI-enabled PCs in 2024.
   • 4 Constituents: DELL, HPQ, LNVGY and MSI.
7. Cloud Computing Stocks Index: DOWN 3.0% last week; UP 4.9% YTD
   • Description:  The cloud computing market is forecast to expand at a 17% CAGR between 2022 and 2027 which should bode well for the stock performances of the cloud computing companies that this Index tracks.
   • 8 Constituents: ANET, BOX, DBX, DDOG, DLR, EQIX, PSTG and VRSN.
8. Micro/Small Cap AI Stocks Index: DOWN 3.7% last week; UP 7.6% YTD
   • Description: Micro/small cap AI stocks are inexpensive (majority trading for under $5/share), and with potentially explosive upside potential (potential of becoming a key suppliers to the mega/large cap AI companies or being bought out at a premium price/share), that warrant investors' attention. This Index tracks the performance of the largest of those stocks.
   • 8 Constituents: AAOI, BBAI, DMRC, EVLV, INOD, REKR, SOUN and VRSSF.
9. Custom Design AI Chip Stocks Index: DOWN 4.2% last week; UP 1.6% YTD
   • Description: Given a projected 11% CAGR between now and 2028, the building of new chip manufacturing plants, and the rapid growth in sales of EVs and their resultant chip usage, the stock prices of electronic design automation (EDA) software companies creating these custom designed chips stocks is set to take off. This Index tracks the stock price changes in these companies.
   •  3 Constituents (soon to be only 2): ANSS, SNPS (which is acquiring ANSS) and CDNS, 

In Summary

On average, the above 9 AI categories were DOWN 1.5% last week but are UP 12.9% YTD.

In comparison,

• the NASDAQ was DOWN 1.3% last week and is UP 5.1% YTD,
• the AIQ Global X Artificial Intelligence & Technology ETF (AIQ) of 91 constituents was DOWN 1.1% last week but is UP 4.6% YTD and
• the iShares Trust S&P Semiconductor Index Fund (SOXX) was DOWN 0.7% last week and is UP 8.5% YTD.

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