Cloud ETFs Poised to Benefit from Generative AI Boom

Cloud ETFs Poised to Benefit from Generative AI Boom
Most sophisticated artificial intelligence models require enormous computational power, particularly since they work with massive datasets and complex algorithms. Cloud computing is essential for the development and deployment of AI.
Since most generative AI models require substantial computing power to train and run, the cloud technology is poised for a major boost from the computing demands of a generative AI boom.
Enterprise spending on cloud computing grew at a slower pace over the past few quarters as companies tried to control costs due to an economic slowdown. But according to some experts, the worst may be over now.
Many companies now prefer to rely on cloud-based service providers for highly specialized computing services so that they can focus on their core businesses.
Cloud computing is not only more secure but also cheaper than traditional systems. Additionally, it provides firms with a lot of flexibility and agility in scaling up or down their computing capacity according to business needs.
The First Trust Cloud Computing ETF SKYY tracks a strength-weighted index of infrastructure, platform, and software cloud companies. Microsoft MSFT , Amazon AMZN and Alphabet GOOG are among its top holdings.
The Global X Cloud Computing ETF CLOU holds companies that are positioned to benefit from the increased adoption of cloud computing. Zscaler ZS and Twilio TWLO are its top holdings.
The WisdomTree Cloud Computing ETF WCLD tracks an equal-weighted index of emerging companies focused on cloud software and services. MongoDB MDB and Shopify SHOP are the top holdings in the fund currently.