The Betashares NASDAQ 100 ETF (ASX: NDQ) offers investors direct exposure to some of the world's biggest and most profitable tech stocks with a single investment.
NDQ, an ASX-listed ETF (exchange-traded fund), aims to track the performance of the NASDAQ-100 Index (NASDAQ: NDX).
As such, it's been on a tear so far in 2023.
Year to date the NASDAQ-100 is up 35.2%. NDQ, as you can see in the chart below, is performing slightly better. Since the opening bell on 3 January, the ASX ETF is up 37.5%.
Of course, if the NASDAQ falls, so too will NDQ.
But with rapid advances in artificial intelligence (AI) fuelling investors' animal spirits, Wedbush Securities managing director Dan Ives believes the United States tech sector could enjoy a strong second half of 2023.
ASX-listed NDQ and the 'AI Gold Rush'
Commenting on the outlook for the US tech sector, Ives said (quoted by The Australian Financial Review), "We believe overall the tech sector will be up another 12% to 15% in the second half of this year led by software and the chip sector."
A 15% gain on the NASDAQ-100 would likely see ASX-listed NDQ post similar gains.
The investment firm's bullishness stems from the massive, evolving potential of AI technology.
According to Ives:
The 2nd, 3rd, and 4th derivatives of this AI Gold Rush are just starting to evolve for the tech landscape based on our recent work in the field and we view this as a 1995 Internet Moment not a 1999 Dot.Bubble Moment.
As for which tech giants stand to benefit the most, Ives said that while there are currently market leaders the "AI arms race" will continue for the next decade. Meaning new leaders could well emerge.
Ives said:
With Microsoft a clear market leader in the AI race along with Nvidia, this battle will be a long one over the next decade as we expect other technology companies besides Google, such as Oracle, Amazon, Salesforce, Palantir, MongoDB, Apple, IBM, Meta, Adobe, Snowflake, C3.ai, and other tech stalwarts along with smaller players in the industry, to collectively spend tens of billions in this AI arms race over the coming years.
While none of these big tech names are listed on the ASX, NDQ's top four holdings are Microsoft, Amazon, Apple and Nvidia.
Ives noted that "bears will continue to fret about tech valuations and the uncertain macro backdrop".
But he's decidedly not in that bearish camp.
"We believe this ultimately is the start of a new tech bull market we see heading into 2024 being driven by this AI revolution coupled with a stabilising IT spending environment," Ives said.
Investors seeking exposure to that "AI revolution" on the ASX may wish to run their slide rules over Betashares NDQ ETF.
