The ALPS O’Shares Global Internet Giants ETF (OGIG) is reflecting a notable shift in artificial intelligence investment, moving away from hardware and toward companies generating revenue through AI-powered advertising and data licensing, according to latest quarterly insights.
AI Investment Evolves beyond the Hardware
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The ETF has outperformed its peers, driven by companies leveraging AI for ad optimization.
- OGIG has returned 29.1% over three years,exceeding its category average of 24.2%.
- Growth is stemming from companies outside the “Magnificent Seven” utilizing AI to refine ad targeting and user engagement.
- AppLovin Corp. (APP) saw a 105.25% surge in Q3 after expanding its AI advertising engine.
- Reddit Inc. (RDDT) climbed 52.75% in Q3, fueled by advertising and data licensing for AI training.
Over the past three years, the internet giants ETF has delivered a 29.1% return, surpassing the 24.2% average for its category. This outperformance, according to SS&C ALPS, is largely attributable to companies beyond the well-known “Magnificent seven” that are successfully integrating AI to optimize advertising and enhance user experiences.
AppLovin’s AI-Driven Growth
AppLovin corp. (APP), comprising 2.4% of OGIG’s holdings, experienced a ample 105.25% increase in the third quarter. This growth was spurred by the expansion of its AI advertising engine, Axon, beyond the gaming sector into e-commerce and other industries, as detailed in the quarterly report. AppLovin was added to the S&P 500 Index in September.
Axon utilizes artificial intelligence to assist app developers and marketers in acquiring users and maximizing ad revenue. The expansion of Axon into new markets through the Axon ads Manager tool prompted a series of price target increases from Wall Street analysts.
Reddit Monetizes its Data Archive
Reddit Inc. (RDDT), representing 1.7% of the fund, saw a 52.75% increase in Q3. This revenue growth is linked to advertising and data licensing agreements that leverage its 20-year archive for artificial intelligence training, according to the quarterly insights report. The social networking platform reached all-time highs following a quarterly earnings report that exceeded analyst expectations.
Year-to-date, the fund has gained 15.6%, with a 14.3% return over the past year, according to ETF Database. As of the latest data, OGIG holds $141.8 million in assets under management and has an expense ratio of 0.48%.
Meta Platforms Inc. (META) constitutes the fund’s largest holding at 6.2%, followed by Microsoft Corp. (MSFT) at 6.1% and Alphabet Inc. (GOOGL) at nearly 6%, according to ETF Database.
The dialogue services sector delivered the strongest performance within OGIG during the third quarter, contributing 3.8% to overall returns.details technology added 2.2%, while consumer discretionary contributed 1.2%.
OGIG tracks the O’Shares Global Internet Giants Index,which prioritizes companies demonstrating strong gross margins and enduring cash flow.
What factors are driving the success of OGIG? The ETF’s success is tied to its focus on internet giants that are effectively monetizing AI through advertising and data licensing, rather than solely investing in AI hardware.
