The rise of artificial intelligence (AI) as a prominent investment theme in 2023 has been widely acknowledged. As we enter 2024, the momentum behind AI shows no signs of slowing down, sparking interest among investors. However, amidst the buzz surrounding AI, there is another tech sector that often gets overshadowed – cloud computing.
Cloud computing has experienced significant growth and is not solely reliant on the AI trend. While it is true that AI can benefit from the processing power offered by cloud computing, the potential of cloud computing extends far beyond AI. By investing in a cloud computing exchange-traded fund (ETF), investors can gain exposure to this promising sector.
A cloud computing ETF encompasses a diverse range of companies, including data center and infrastructure providers, as well as software companies specializing in designing cloud computing solutions. Unlike AI, cloud computing focuses on networking different programs and computers to provide analytics separate from AI analytics. It can also interact with digital assets and trends in quantum computing.
With the possibility of rate cuts looming, a cloud computing ETF could be a lucrative investment. One such option is the Fidelity Cloud Computing ETF (FCLD), which will reach its three-year ETF milestone later this year. FCLD tracks the Fidelity Cloud Computing Index, an index composed of global cloud computing firms weighted by market capitalization.
FCLD identifies companies that generate at least 50% of their revenue from cloud infrastructure, platforms, or software. Interestingly, this approach ensures diversified exposure beyond the commonly known “Magnificent Seven” holdings. Leading the way are companies like Salesforce (CRM) and Intuit (INTU). Over the past year, FCLD has delivered a solid return of 37.4%, and in the last three months alone, it has provided a return of 20.1% as of February 20th, according to VettaFi data.
In conclusion, while AI remains a popular investment theme and undoubtedly contributes to cloud computing, it is essential not to overlook the individual potential of cloud computing technology. Investors seeking unique opportunities should consider exploring cloud computing ETFs like FCLD. By doing so, they can gain exposure to a thriving sector that offers promising returns outside of AI-dominated spaces.
FAQ:
1. What is the main topic of the article?
– The main topic of the article is the potential of cloud computing as an investment opportunity.
2. How does cloud computing relate to artificial intelligence (AI)?
– Cloud computing can support AI by providing the necessary processing power, but its potential extends beyond AI. Cloud computing focuses on networking programs and computers to provide analytics separately from AI analytics.
3. What is a cloud computing ETF?
– A cloud computing exchange-traded fund (ETF) is a type of investment fund that allows investors to gain exposure to the cloud computing sector. It encompasses a diverse range of companies, including data center and infrastructure providers, as well as software companies specializing in designing cloud computing solutions.
4. What is the Fidelity Cloud Computing ETF (FCLD)?
– The Fidelity Cloud Computing ETF (FCLD) is a specific cloud computing ETF option. It tracks the Fidelity Cloud Computing Index, which is composed of global cloud computing firms weighted by market capitalization. FCLD identifies companies that generate at least 50% of their revenue from cloud infrastructure, platforms, or software. It includes companies like Salesforce (CRM) and Intuit (INTU) as its leading holdings.
5. What has been the performance of FCLD?
– FCLD has delivered a solid return of 37.4% over the past year and a return of 20.1% in the last three months, as of February 20th, according to VettaFi data.
Definitions:
– Artificial Intelligence (AI): The simulation of human intelligence processes by machines, including learning, reasoning, and self-correction.
– Cloud computing: The use of remote servers over the internet to store, manage, and process data, rather than using a local server or personal computer.
– Cloud computing ETF: A type of investment fund that allows investors to gain exposure to the cloud computing sector by pooling their money and investing in a diversified portfolio of cloud computing-related companies.
– Data center: A facility used to house computer systems and associated components, such as telecommunications and storage systems.
– Infrastructure providers: Companies that provide the underlying physical or virtual resources, such as servers and networking equipment, required for cloud computing services.
– Software companies: Companies that develop and sell computer programs, applications, and solutions.
– Market capitalization: The total value of a company’s outstanding shares of stock, calculated by multiplying the share price by the number of shares.
Suggested related links:
– Fidelity Investments
– Salesforce
– Intuit
The source of the article is from the blog aovotice.cz