Artificial intelligence represents not just a technological revolution but a lucrative opportunity, projected to infuse a massive $15.7 trillion into the global economy by 2030, as highlighted by analysts at Bank of America.
While much attention has been on the downstream impact of AI in transforming everyday life, the upstream domain is equally pivotal and transformative.
The Hardware Powering AI
An exemplary player in this arena is Nvidia, renowned for manufacturing cutting-edge chips crucial for powering AI servers. Positioned as a premier AI stock, Nvidia has witnessed a remarkable surge of over 260% in the past year, akin to a blazing comet streaking across the financial sky.
In the industry domain of AI hardware, players like Taiwan Semiconductor, Advanced Micro Devices, and other protagonists are akin to purveyors of indispensable tools, akin to those selling picks and shovels to miners in a metaphorical gold rush.
The Indispensable Role of Copper
Stepping further upstream lies the realm of precious metals and critical minerals that underpin the functioning of AI and the broader tech landscape. Among these, copper plays a central role.
As the highly conductive metal weaves connections within integrated circuits, it acts as the neural wiring, akin to axons in a brain. Moreover, copper facilitates the transmission of power vital for the circuit’s operation, akin to the life force pulsating through a living organism.
Beyond chips, copper is a linchpin of the electrical grid, essential in turbines that convert energy, batteries that store it, and the myriad wires and transformers that transmit it across the grid. Without copper, the gears of our modern civilization would grind to a halting standstill.
Surging Demand, Shrinking Supply
As trends like AI expansion, electric vehicles, and decarbonization gain steam, the need for copper is on an upward trajectory. Projections indicate that global demand for copper will escalate to 36.6 million metric tons by 2031, reflecting a significant surge from the current 25 million metric tons.
However, the global capacity for mining and recycling copper is struggling to keep pace. Recent agreements among Chinese smelters to curb production in response to raw material scarcities underscore the tightening supply dynamics in the copper market.
The convergence of escalating copper demand and a tightening supply landscape positions copper, and the stakeholders engaged in its extraction and processing, as an appealing investment prospect.
All-Inclusive Investment Approach
Recognizing the tangible undercurrents of these trends, Ivana Delevska and the team at Spear Invest champion an investment strategy that spans the full spectrum of the AI value chain, from upstream to downstream.
Their flagship fund, Spear Alpha ETF, boasts a diverse portfolio encompassing companies involved in AI utilization, hardware production, to mining and processing copper – with stalwarts like ZScaler, Nvidia, Freeport-McMoRan, and Teck Resources as prominent fixtures.
This robust industrial positioning, deeply embedded in the broader technological landscape, has yielded substantial returns, with SPRX witnessing approximately 70% growth since a year ago, akin to a sturdy oak tree blossoming under the warming rays of the financial sun.
