They say a rising tide lifts all boats, and that has certainly been happening with the artificial intelligence trade. But let's not forget that the tide also goes out at times as well. So how can you make sure you stay afloat when all of that happens? Dan Ives is the global head of technology research at Wedbush Securities alongside Todd Rosenbluth, the director of research at Vetify. Let's kick things off, gentlemen, with Dan. You just launched an AI-focused thematic exchange-traded fund. The ticker is, maybe not shockingly, IVES, your last name. Your name is literally on the line with this one. So let's talk about why and what exactly is the impetus behind putting an AI-focused thematic ETF on the market.
No, great, and look, it's awesome to be here. Look, I mean, to me, it's really I wanted a thematic way for investors around the world to ultimately, you know, invest in the theme. You know, I mean, when I travel around the world, how do you invest in AI? So this is really based on my AI Ives 30 report, understand who are the derivative beneficiaries, whether it's software, chips, consumer, some under the radar, some maybe on the autonomous side. And basically, this is a dynamic list. It's a dynamic 30 names every quarter. We're going to change in terms of someone who could come in, who ultimately come out. But Dom, for me, it was really all the work we do to put it thematically in a way that investors, whether retail, institutional, could invest in this AI theme.
Now, it's a concentrated portfolio. It's only 30 names that we're talking about here. Without giving away the secret sauce, because you're a fundamental analyst, you look at certain factors and whatnot. What are the common elements or factors, if you will, that go into why these 30 names at this point? And you mentioned the rebalance. How exactly then do you know, based upon those factors, whether quantitative or qualitative, what then maybe goes out and what else would then come in?
Yeah, it's a great question. I mean, look, we spent all of our time, whether it's here, whether it's Asia, across Europe, understanding what are the technologies driving AI. So whether it was on the chip side, in software, what ultimately from an engineer perspective, from a customer perspective, who's ultimately driving, who's winning when it comes to the use cases. Whether it's Palantir, is it MongoDB, is it Snowflake? Then on the consumer side, whether it's, you know, from names like Meta or some of the smaller names who ultimately could play from a consumer perspective. So for us, it's really our research. It's what we spend and my team spends all of our time doing, trying to understand who is driving the use cases, where is the technology going, but most importantly, what are the second, third, fourth beneficiary, then the derivatives of AI.
Now, speaking of those orders of differential, those derivative-type plays, where are you seeing most of the portfolio drift towards? There's 30 names. Are they mostly the consumer AI names? Are they mostly the hyperscaler types? Are they mostly the hardware or the software or whatnot? What exactly do you see right now being where the most heat is, so to speak, in those picks?
And in terms of the heat, like it obviously started off as chips led by Nvidia, and of course they continue to be a core top holding. But it's software. In other words, the use cases are going to be driven in software, and that could be from hyperscaler to use, whether it's Pega, whether it's Palantir, whether it's MongoDB, because I actually think right now we're in the software phase. I think software is going to be driving really a lot of the use cases, and I think we've seen that with Oracle and others, right? Because to me, that's really going to be the epicenter of the AI theme over the next 6, 9, 12 months in terms of software. But it's trying to understand who within software, just because they say AI on a conference call doesn't make them an AI player.
Now, Todd, this is an interesting one for a lot of investors out there as well, because this particular fund and these stock picks enter a kind of growingly crowded field in terms of thematic AI plays. From your kind of macro perspective, looking at the entire ETF market, just how competitive is it for asset managers and advisers to garner funds into the thematic ETF trade for AI? Or is the market, the TAM, the total addressable market, so big that it doesn't matter how many people enter because the demand is there amongst investors, whether they're retail or institutional?
