Here’s what the robot fund that’s beating the S&P 500 is investing in now

By Barbara Kollmeyer

A small struggle, led by technology, is shaping up for Tuesday, as a big earnings week is upon us and COVID-19 worries hover. One distraction right now — the war between short sellers and a group of stock enthusiasts behind GameStop /zigman2/quotes/203755179/composite GME +18.56% .

Shares of the videogame retailer are up 23% in premarket trading after Monday’s wild session . To some, this is stirring memories of the dot-com boom and bust, and fears history could repeat.

Maybe one day it will be easier, when the robots can do the thinking for us. That brings us to our call of the day , which comes from the DataTrek Research blog, who wonders whether a fund that relies on artificial intelligence for investing ideas and is heavy on tech stocks right now knows something we don’t.

DataTrek notes the AI Powered Equity /zigman2/quotes/204224847/composite AIEQ -4.65% exchange-traded fund is up 12% year to date, versus a 2.6% gain for the S&P 500 /zigman2/quotes/210599714/realtime SPX -2.45% , and for 2020 was up 25%, versus an 18% gain, respectively. It has gained 101% from the March COVID-19 pandemic lows, versus a 72% gain for the S&P.

Electric-car maker Tesla /zigman2/quotes/203558040/composite TSLA -8.06% , solar solutions group SunPower /zigman2/quotes/200243424/composite SPWR -8.37% , chip group Advanced Micro Devices /zigman2/quotes/208144392/composite AMD -5.20% , energy technology group Enphase Energy /zigman2/quotes/207948472/composite ENPH -7.46% , and tech giant Alphabet /zigman2/quotes/202490156/composite GOOGL -3.26% are the top five holdings.

What DataTrek found was the fund’s top picks are more tech heavy than last October, when more cyclical flavored stocks such as health care group Pfizer /zigman2/quotes/202877789/composite PFE +0.21% and automobile maker Ford /zigman2/quotes/208911460/composite F -4.16% made it into the top 10.

“AIEQ seems to have been picking up a good bit of market ‘signal’ in the last 12 months, so the fact that it is lightening up on cyclicals at the top of the sheet and maintaining/increasing its exposure to disruptive tech names (TSLA, SPWR, ENPH) is interesting,” says DataTrek.

What it could mean? A human manager backing away from cyclicals at the moment could be a sign of cold feet over the progress of the COVID-19 vaccine rollout.

As the DataTrek folks say, this AI ETF’s plays mirror those of a successful hedge-fund manager of the 1990s — “well-known stocks that play well-understood themes. Perhaps the real power of artificial intelligence-powered investing is simply not overthinking things too much.”

The markets

Stocks /zigman2/quotes/210598065/realtime DJIA -1.75% /zigman2/quotes/210599714/realtime SPX -2.45% /zigman2/quotes/210598365/realtime COMP -3.52% are flat, while European equities /zigman2/quotes/210599654/delayed XX:SXXP -0.39% are higher. China’s CSI 300 /zigman2/quotes/210598128/delayed XX:000300 -2.43% and Hong Kong’s Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI -3.64% lost more than 2% each. That is after the People’s Bank of China, in a surprise move, pulled funds from the financial system and reportedly warned of asset bubble risks.

The tweet

From Alexis Ohanian, husband of tennis star Serena Williams and co-founder of Reddit:

The buzz

Reporting ahead of the market open, shares of conglomerate General Electric /zigman2/quotes/208495069/composite GE -2.74% are rising as revenue beat forecasts , and health care group Johnson & Johnson /zigman2/quotes/201724570/composite JNJ +0.10% posted a profit and growth in pharma sales. Financial services group American Express /zigman2/quotes/203805826/composite AXP -2.01% said revenue fell . After the close, tech giant Microsoft /zigman2/quotes/207732364/composite MSFT -2.37% , coffee group Starbucks /zigman2/quotes/207508890/composite SBUX -0.87% , and chip companies Advanced Micro Devices /zigman2/quotes/208144392/composite AMD -5.20% and Texas Instruments /zigman2/quotes/202237907/composite TXN -4.94% report.

Shares of e-commerce website Etsy /zigman2/quotes/202790087/composite ETSY -5.51% are up 9% in premarket. That move seems to have coincided with a comment on Twitter /zigman2/quotes/203180645/composite TWTR +3.71% by Tesla Chief Executive Elon Musk, who said “ I kinda love Etsy. “

The Federal Housing Finance Agency house price index, the S&P Case-Shiller home price index, and consumer confidence data are all ahead.

/zigman2/quotes/203755179/composite

Add to watchlist GME

GameStop Corp. Cl A

US : U.S.: NYSE

$ 108.73

+17.02 +18.56%

Volume: 150.31M

Feb. 25, 2021 4:00p

P/E Ratio

N/A

Dividend Yield

0.00%

Market Cap

$6.40 billion

Rev. per Employee

$461,857

/zigman2/quotes/204224847/composite

Add to watchlist AIEQ

AI Powered Equity ETF

US : U.S.: NYSE Arca

$ 38.14

-1.86 -4.65%

Volume: 41,055

Feb. 25, 2021 8:00p

/zigman2/quotes/210599714/realtime

Add to watchlist SPX

S&P 500 Index

US : S&P US

3,829.34

-96.09 -2.45%

Volume: 2.92B

Feb. 25, 2021 5:19p

/zigman2/quotes/203558040/composite

Add to watchlist TSLA

Tesla Inc.

US : U.S.: Nasdaq

$ 682.22

-59.80 -8.06%

Volume: 39.02M

Feb. 25, 2021 4:00p

P/E Ratio

1,085

Dividend Yield

N/A

Market Cap

$712.23 billion

Rev. per Employee

$445,694

/zigman2/quotes/200243424/composite

Add to watchlist SPWR

SunPower Corp.

US : U.S.: Nasdaq

$ 34.59

-3.16 -8.37%

Volume: 4.93M

Feb. 25, 2021 4:00p

P/E Ratio

14.50

Dividend Yield

N/A

Market Cap

$6.44 billion

Rev. per Employee

$511,286

/zigman2/quotes/208144392/composite

Add to watchlist AMD

Advanced Micro Devices Inc.

US : U.S.: Nasdaq

$ 82.42

-4.52 -5.20%

Volume: 54.63M

Feb. 25, 2021 4:00p

P/E Ratio

40.52

Dividend Yield

N/A

Market Cap

$105.31 billion

Rev. per Employee

$774,841

/zigman2/quotes/207948472/composite

Add to watchlist ENPH

Enphase Energy Inc.

US : U.S.: Nasdaq

$ 167.37

-13.50 -7.46%

Volume: 5.93M

Feb. 25, 2021 4:00p

P/E Ratio

185.74

Dividend Yield

N/A

Market Cap

$23.34 billion

Rev. per Employee

$911,088

/zigman2/quotes/202490156/composite

Add to watchlist GOOGL

Alphabet Inc. Cl A

US : U.S.: Nasdaq

$ 2,015.95

-67.86 -3.26%

Volume: 2.08M

Feb. 25, 2021 4:00p

P/E Ratio

35.35

Dividend Yield

N/A

Market Cap

$1408.49 billion

Rev. per Employee

$1.35M

/zigman2/quotes/202877789/composite

Add to watchlist PFE

Pfizer Inc.

US : U.S.: NYSE

$ 33.82

+0.07 +0.21%

Volume: 37.51M

Feb. 25, 2021 4:03p

P/E Ratio

19.83

Dividend Yield

4.61%

Market Cap

$187.60 billion

Rev. per Employee

N/A

/zigman2/quotes/208911460/composite

Add to watchlist F

Ford Motor Co.

US : U.S.: NYSE

$ 11.76

-0.51 -4.16%

Volume: 75.25M

Feb. 25, 2021 4:02p

P/E Ratio

N/A

Dividend Yield

0.00%

Market Cap

$48.82 billion

Rev. per Employee

$683,570

/zigman2/quotes/210598065/realtime

Add to watchlist DJIA

Dow Jones Industrial Average

US : Dow Jones Global

31,402.01

-559.85 -1.75%

Volume: 458.96M

Feb. 25, 2021 5:19p

/zigman2/quotes/210599714/realtime

Add to watchlist SPX

S&P 500 Index

US : S&P US

3,829.34

-96.09 -2.45%

Volume: 2.92B

Feb. 25, 2021 5:19p

/zigman2/quotes/210598365/realtime

Add to watchlist COMP

NASDAQ Composite Index

US : U.S.: Nasdaq

13,119.43

-478.54 -3.52%

Volume: 5.47M

Feb. 25, 2021 5:16p

/zigman2/quotes/210599654/delayed

Add to watchlist XX:SXXP

STOXX Europe 600 Index

XX : STOXX

410.14

-1.59 -0.39%

Volume: 0.00

Feb. 26, 2021 11:37a

/zigman2/quotes/210598128/delayed

Add to watchlist XX:000300

CSI 300 Index

XX : China Securities Index

5,336.76

-132.80 -2.43%

Volume: 21.23B

Feb. 26, 2021 3:00p

/zigman2/quotes/210598030/delayed

Add to watchlist HK:HSI

Hang Seng Index

HK : Hong Kong Exchange

28,980.21

-1,094 -3.64%

Volume: 4.13M

Feb. 26, 2021 4:09p

/zigman2/quotes/208495069/composite

Add to watchlist GE

General Electric Co.

US : U.S.: NYSE

$ 12.76

-0.36 -2.74%

Volume: 92.34M

Feb. 25, 2021 4:00p

P/E Ratio

21.97

Dividend Yield

0.31%

Market Cap

$115.04 billion

Rev. per Employee

$459,155

/zigman2/quotes/201724570/composite

Add to watchlist JNJ

Johnson & Johnson

US : U.S.: NYSE

$ 162.76

+0.17 +0.10%

Volume: 9.72M

Feb. 25, 2021 4:00p

P/E Ratio

29.52

Dividend Yield

2.48%

Market Cap

$427.40 billion

Rev. per Employee

$613,918

/zigman2/quotes/203805826/composite

Add to watchlist AXP

American Express Co.

US : U.S.: NYSE

$ 137.08

-2.81 -2.01%

Volume: 3.61M

Feb. 25, 2021 4:03p

P/E Ratio

36.39

Dividend Yield

1.25%

Market Cap

$112.69 billion

Rev. per Employee

$599,451

/zigman2/quotes/207732364/composite

Add to watchlist MSFT

Microsoft Corp.

US : U.S.: Nasdaq

$ 228.99

-5.56 -2.37%

Volume: 39.54M

Feb. 25, 2021 4:00p

P/E Ratio

34.10

Dividend Yield

0.98%

Market Cap

$1769.03 billion

Rev. per Employee

$877,393

/zigman2/quotes/207508890/composite

Add to watchlist SBUX

Starbucks Corp.

US : U.S.: Nasdaq

$ 103.47

-0.91 -0.87%

Volume: 7.53M

Feb. 25, 2021 4:00p

P/E Ratio

185.93

Dividend Yield

1.74%

Market Cap

$122.89 billion

Rev. per Employee

$67,371

/zigman2/quotes/208144392/composite

Add to watchlist AMD

Advanced Micro Devices Inc.

US : U.S.: Nasdaq

$ 82.42

-4.52 -5.20%

Volume: 54.63M

Feb. 25, 2021 4:00p

P/E Ratio

40.52

Dividend Yield

N/A

Market Cap

$105.31 billion

Rev. per Employee

$774,841

/zigman2/quotes/202237907/composite

Add to watchlist TXN

Texas Instruments Inc.

US : U.S.: Nasdaq

$ 170.53

-8.86 -4.94%

Volume: 6.10M

Feb. 25, 2021 4:00p

P/E Ratio

28.55

Dividend Yield

2.39%

Market Cap

$165.08 billion

Rev. per Employee

$482,033

/zigman2/quotes/202790087/composite

Add to watchlist ETSY

Etsy Inc.

US : U.S.: Nasdaq

$ 197.58

-11.52 -5.51%

Volume: 3.70M

Feb. 25, 2021 4:00p

P/E Ratio

109.64

Dividend Yield

N/A

Market Cap

$26.37 billion

Rev. per Employee

$659,983

/zigman2/quotes/203180645/composite

Add to watchlist TWTR

Twitter Inc.

US : U.S.: NYSE

$ 74.59

+2.67 +3.71%

Volume: 63.63M

Feb. 25, 2021 4:03p

P/E Ratio

N/A

Dividend Yield

N/A

Market Cap

$57.40 billion

Rev. per Employee

$675,700