Especially in the realm of widely followed growth stocks, some sell-side analysts develop cult-like followings. That status isn't cultivated via perfect track records, because no one gets it right all the time, but some analysts ascend to that rarefied territory by being correct more often than not.
For some investors, Wedbush's Dan Ives is that analyst in the artificial intelligence (AI) space. He's known for being a snazzy dresser, but more importantly, he's a noted AI bull with a knack for identifying AI winners. He's long pounded the table on beloved stocks such as Nvidia and Tesla while describing the AI opportunity as "generational" and "golden."
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Those views are encapsulated in the aptly named Dan Ives Wedbush AI Revolution ETF (IVES +0.16%) -- an exchange-traded fund (ETF) that has the potential to deliver mammoth gains over the next several years if the AI train continues chugging along or, better yet, accelerates.
What you're getting with this ETF
One of the keys to success with ETF investing is knowing precisely what you're getting involved with before directing your hard-earned dollars into a fund. That's especially true in this case.
First, this is a new ETF. It debuted in June, so it has not been battle-tested across a variety of market circumstances, and it certainly hasn't been through a bear market. With ETFs, age is nothing but a number, but some market participants prefer not to get involved with rookie ETFs until those funds gain some seasoning and a track record.
Speaking of numbers, this ETF is off to a fast start in terms of accumulating assets under management (AUM). Its AUM tally stood at north of $882 million as of Nov. 21 -- impressive work in just over five months, and likely a testament to the power of the Ives name as it relates to tech stocks.
NYSEMKT: IVES
Key Data Points
Another point to know with this ETF is that despite its ties to Ives, the fund doesn't directly engage in active stock-picking. Rather, it follows the Solactive Wedbush Artificial Intelligence index. That index, and thus the ETF, is a collection of the 30 AI enablers and hyperscalers that Wedbush views as best-positioned to capitalize on long-term AI expansion. Wedbush, however, does actively manage its index.
A point in the AI ETF's favor is convenience. It's essentially a "Magnificent Seven"-plus fund, as those megacap stocks represent half of the ETF's top 14 holdings, and combine to account for approximately a third of the portfolio's value.
Why this ETF can compound in the coming years
Guidance by a popular analyst is a nice attribute on a superficial level, but smart investors will want to know why this new ETF can potentially deliver triple-digit percentage gains over the next few years. Part of the bullish thesis is rooted in AI spending, which should benefit this ETF's holdings. Research firm Gartner forecasts that those expenditures will rise to $1.5 trillion this year before surging to $2 trillion in 2026.
Another reason this ETF could prove rewarding through 2030 is Ives' own assessment that "peak AI" is at least seven years away. If that outlook is validated, the Wedbush ETF could have a long road of compounding investors' capital ahead of it.
Finally, this AI ETF has robust exposure to AI leaders outside the Magnificent Seven -- stocks that some experts believe will be among the big winners when the AI trend pens its next chapter. That group includes Broadcom, Palantir Technologies, and Oracle.