BOTZ: A Bullish Trend as AI Stocks Surge

Military applications, investor interest appear bullish for robotics/AI ETF.

In addition to performing tasks and writing term papers, people have turned to robots and artificial intelligence for another service: boosting portfolios. 

The Indxx Global Robotics & Artificial Intelligence Thematic Index has gained 19% so far this year, more than double the 7.4% gain of the SPDR S&P 500 ETF Trust (SPY). The Global X Robotics & Artificial Intelligence ETF (BOTZ) tracks the index, and has had an identical gain this year. 

Robotics combines computer science and engineering to create a machine that can automatically carry out complex actions. Artificial intelligence is intelligence demonstrated by machines, mapping inputs to develop outputs. Robotics and artificial intelligence are the next steps in technological advances.  

BOTZ is a highly liquid product. At around $25 per share, BOTZ has $1.71 billion in assets under management. BOTZ trades an average of 761,534 shares daily and charges a 0.69% management fee.  

A Bullish Trend Since October 

On Oct. 13, BOTZ reached a $17.33 low, which was a significant bottom. 

Source: etf.com 

The chart shows the pattern of higher lows and higher highs over the past months that took BOTZ to $25.51 in March 2023, a 47.2% rise. Currently, it’s slightly below the most recent high.  

Funds Flowing Into BOTZ 

Over the past months, capital has flowed into BOTZ as the price rose, thanks in part to the surge in popularity for ChatGPT and Nvidia chips powering AI. 

Source: etf.com 

As the etf.com Fund Flows tool highlights, $109.37 million has flowed into BOTZ since the day it reached its bottom on Oct. 13, 2022.  

BBH Survey Supports BOTZ 

On March 29, 2023, Brown Brothers Harriman released its 10th Annual Global ETF Investor Survey, highlighting the opinions of ETF investors.  

Source: Brown Brothers Harriman 

The above chart shows robotics and artificial intelligence were second only to the internet/technology sector and ahead of environmental, social and governance in planned thematic strategy investments for 2023. The eft.com fund flows data over the past months validate that investors are putting their money where their opinions are, with robotics and artificial intelligence a leading theme.  

The U.S. and China, the world’s leading economies, are in a footrace in the robotics and AI sectors. While the White House laid out a blueprint for an AI Bill of Rights, President Biden commented that technology companies must ensure their products are safe, as artificial intelligence could be “dangerous.” China does not seem to see the sector as dangerous, as it looks to leapfrog the U.S. on technological advances.  

Military Applications 

China’s military buildup includes using robots for warfare. In early 2022, China unveiled the world’s largest quadruped military robot. The robot can carry up to 352 pounds of payload and run six miles per hour.  

China has also deployed machine gun-wielding robots near the India border, reflecting the technological advances in warfare. As U.S.-Chinese relations have deteriorated over China’s “no-limits” alliance with Russia and its plans for reunification with Taiwan, the potential for a conflict is rising.  

While U.S. and China are nuclear powers, conventional warfare likely includes robots and AI technology. Military contracts will increase earnings for companies on the cutting edge of technology. BOTZ’s top holdings include a diverse group of companies that could receive significant military expenditures over the coming years as worldwide tensions rise.  

Significant Upside Potential 

BOTZ traded to an all-time high in November 2021 at $39.99 per share.  

Source: etf.com 

The long-term chart above shows that at $24.50 per share on April 6, BOTZ was in a bullish trend, with more than a 63% upside before challenging the November 2021 record peak.  

Robotics and AI are significant technology sectors for the future. BOTZ is a highly liquid ETF that will rise with the earnings in the industry that stand to change many aspects of life aside from military applications.  

Andrew Hecht is a Nevada-based writer and analyst covering stocks, bonds, foreign exchange, cryptocurrency and raw material markets. Follow him on Twitter at @technomentals.