The ARK Autonomous Technology & Robotics ETF (CBOE: ARKQ) is one of the premier avenues for investors looking to access artificial intelligence (AI) and autonomous technologies, among other disruptive themes.
As an actively managed fund, ARKQ isn’t constrained by indexes and can be more responsive to emerging AI trends, including transformers. Transformers are emerging as vital backbones in the AI space, but many competing funds lack adequate exposure.
“Pioneered by Google, Transformers is a new architecture that enables computers to understand language with unprecedented accuracy, as shown below on the right. Unlike prior language models that processed words sequentially, Transformers can discern connections between and among words in a sentence,” says ARK analyst James Wang.
ARKQ invests in companies that stand to benefit from the increased adoption and utilization of robotics and artificial intelligence (AI), including those involved with industrial robotics and automation, non-industrial robots, and autonomous vehicles.
A Transformative Opportunity with ARKQ
Disruptive technology like artificial intelligence is driving the next level of tech innovation amid the coronavirus pandemic and will continue to do so even after a return to normalcy.
“From an investor perspective, we believe Transformers will expand the AI addressable market meaningfully. To date, three neural network types – CNNs, RNNs, MLPs – have evolved in the AI market, serving three broad use cases,” adds Wang. “Now the fourth -Transformers – could create and expedite vision and audio applications heretofore not possible. As was the case with image, voice, and recommendation systems, we believe new services and companies will evolve based on natural language understanding. Among them will be information retrieval, call center automation, document summarization, and document generation.”
Companies that can afford to implement both artificial intelligence and robotics, enjoy substantial comparative advantages over those that don’t. As barriers to entry like cost begin to lower for disruptive technology, more companies could be using both as part of their core businesses, which should only propel disruptive-focused funds like ARKQ.
“According to our research, deep learning had added roughly $1 trillion in equity market capitalization to companies like Alphabet, Amazon, Nvidia, and TSMC as of year-end 2019 and perhaps another $250-500 billion in 2020,” concludes Wang. “Now Transformers, the ‘fourth pillar’, could create substantial greenfield opportunities, increasing our confidence in the long term projection we made last year that AI would contribute roughly $30 trillion to global equity market cap creation over the next 20 years.”
For more on disruptive technologies, visit our Disruptive Technology Channel.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.