AI stocks: Sector could return outsized performance in 18 months

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Why AI stocks could return outsized performance in the next 18 months, and 7 leading names with direct exposure, according to an ETFs analyst

But that doesn't mean equity exposure has to be through high-risk companies, says Tejas Dessai.A sudden interest in artificial intelligence has brought the more than decade-old technology to the forefront of investors' minds.The application's ability to interact with users as though it were almost human has sensationalized the technology in the imagination of many, with people testing it out in endless use cases from coding to music composition.

The digital economy forms roughly 10% of the US GDP as of 2021, so the impact of AI could be very broad and touch all areas of the economy, he noted. It's similar to how the internet shifted all aspects of life, he added. Global X is one of the largest issuers of thematic ETFs in the world, with close to $40 billion under management. Its AI-focused passively managed ETF is Global X Robotics and Artificial Intelligence ETF . It has additional ETFs focused on sectors that will be heavily impacted by AI including the Cloud Computing ETF and Cybersecurity ETF .

This means in the short term, he's very bullish on AI stocks. What builds his conviction is the speed of execution at which big tech companies like Microsoft and Google are investing and integrating AI into their business models. This will create a ripple effect that will draw in other tech companies. He believes the next 18 months could return outsized, positive performance. Like with any new technology, there are five main stages of adoption, referred to as the S-Curve.

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