Generative AI: A Productivity Booster for Tech ETFs Like QQQ, QQQM

Artificial intelligence spending is soaring, but are the investments paying off? The answer may decide the fate of tech-heavy ETFs. Funds such as the Invesco QQQ Trust (QQQ) and Invesco NASDAQ 100 ETF (QQQM) hold companies deeply involved in AI.

Zuckerberg's AI Doubts

Meta's CEO, Mark Zuckerberg, has cautioned that massive AI investments might not always yield desired results. There's already some evidence of companies missing the mark with AI spending.

That said, generative AI is viewed as transformative and is being adopted long term. Bumps are expected, but enterprise use of this tech is just beginning, potentially boosting QQQ and QQQM holdings.

AI Adoption on the Rise

End-users are beginning to see AI's potential benefits. Nearly half of S&P 500 companies mention artificial intelligence in their earnings calls. This is more than double the mentions from last year, signaling business adoption.

Still, unlike fleeting tech trends, AI's enthusiasm seems well-placed. There are sound reasons for companies to become AI customers.

Productivity and Profitability

Generative AI can significantly enhance productivity, which often leads to increased profits. Experts estimate a potential boost of 1.4%-2.7% per year over a decade for developed markets.

That means real output increases and lower costs for goods and services. Generative AI's accessibility and versatility are key factors that could fuel growth in developed economies.

Future of Work

AI isn’t necessarily a job killer. AI companies could create higher-level roles where humans work alongside AI. Jobs will focus on conceptual reasoning, emotional intelligence, and creativity.