Where investors may find the next 'big wave' for AI trade

The next significant breakthroughs in artificial intelligence may not be found in familiar territory. Tim Urbanowicz, the chief investment strategist at Innovator from Goldman Sachs Asset Management, is advising investors to broaden their horizons and consider opportunities in emerging markets. In a recent appearance on CNBC's "ETF Edge," Urbanowicz described these regions as potential hotspots for substantial returns in AI investments, dubbing it "the next big wave." His optimism is particularly directed towards Taiwan and South Korea, both of which play a crucial role in the iShares MSCI Emerging Markets ETF that has seen a remarkable 26% increase as of Thursday's market close. Urbanowicz pointed out that these countries are significant players in the AI sector, with valuations that haven't surged as drastically as those in the United States. "There’s still a lot of runway for outsized gains in this AI trade," he stated confidently. So far this year, the iShares MSCI Taiwan ETF has experienced an impressive rise of nearly 67%, while the iShares MSCI South Korea ETF has skyrocketed by 109%. Both of these ETFs include several companies involved in AI memory-related chip manufacturing. In his commentary to CNBC, Urbanowicz underscored the Goldman Sachs ActiveBeta Emerging Markets Equity ETF as a strategic option for investors looking to tap into the potential of AI-driven growth in these emerging markets. However, he also emphasized that he remains optimistic about domestic AI investments, asserting that the U.S. is still well-positioned for success in this evolving landscape.