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The Next Big Theme: June 2024

Jun 24, 2024

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Artificial Intelligence & Technology

AI Chip Upgrade Cycle Intensifies

Chipmakers are racing to launch faster and more powerful processors to stay competitive. AMD recently announced several new AI chips in an effort to capture incremental market share, including the Ryzen AI 300 Series. A competitive product to Qualcomm’s Snapdragon X, the Ryzen AI 300 Series will power Microsoft laptops featuring the AI chatbot Copilot.1 AMD introduced the Ryzen 9000 Series for gaming and content creation desktops, claiming it will be the world’s fastest consumer PC processor.2 In addition, AMD also announced that the Instinct MI325X accelerators, an improved version of its MI300 series, will be available in Q4 2024.3 Similarly, Nvidia announced that its next-generation AI chips, dubbed Rubin, will succeed the Blackwell model that it unveiled just this March, and is still not yet widely available.4 This rapid turnaround highlights the competitive frenzy in the AI chip market. Previously on a two-year upgrade cycle, Nvidia shifted to an annual cadence in an effort to maintain its leadership. AMD plans to release new AI chip technology every year as well.5

Data Center & Digital Infrastructure

AI Boom Fuels Data Center Buildout Explosion

Demand for new data center buildouts isn’t showing any sign of slowing down, especially among major cloud service providers. Amazon Web Services (AWS) recently announced an $11 billion investment for a massive data center complex in Indiana, marking the largest capital investment in the state’s history.6 Google is also set to construct a $2 billion data center in Indiana and spend an additional $1 billion to improve existing facilities in Virginia.7 Meta received approval from the Iowa Economic Development Authority to build a two-building data center on a 328-acre campus in Davenport, Iowa.8 Meta is also embarking on a multi-billion-dollar data center project in Wyoming, aiming to construct one of the state’s most significant high-tech projects ever.9 Meta has targeted Wyoming because of the state’s favorable climate, which can keep the company’s super-heated enterprise system a few degrees cooler than what is typical with water systems. Another benefit with Wyoming is its proximity to vital infrastructure, such as a major high-speed internet trunk line.10

U.S. Infrastructure

Transmission Projects to Enhance U.S. Grid Reliability

The U.S. Department of Energy (DoE) revealed a preliminary list of 10 potential high-priority transmission projects, spanning about 3,500 miles in areas of urgent need.11 These projects are slated to receive federal funding and expedited permitting, which is significant because the permitting process is typically one of the primary hurdles for U.S. transmission projects. Expanding transmission capacity is crucial for improving grid reliability and supporting the anticipated growth in renewable energy. The DoE plans to announce the selected projects and refine their geographic boundaries in fall 2024.12 These initiatives could access up to $4.5 billion in funding, with $2.5 billion allocated through the Inflation Reduction Act.13 Also, in May, the bipartisan Federal Aviation Administration (FAA) reauthorization bill was signed into law.14 This bill authorizes over $105 billion in funding for the FAA, along with $738 million for the National Transportation Safety Board for fiscal years 2024 through 2028. Its aim is to enhance aviation safety and invest in airport and air travel infrastructure nationwide.15

Telemedicine & Digital Health

Telehealth Platforms Expand GLP-1 Accessibility

Telehealth and digital pharmacy startup Hims & Hers is now offering injectable GLP-1 weight loss drugs through its online platform.16 The company, known for providing direct-to-consumer treatments for conditions like anxiety and hair loss, had launched its weight loss program in December 2023, however, GLP-1 medications were not immediately part of this program. Customers can obtain compounded GLP-1 medications via a prescription from a licensed healthcare provider directly on the platform, with injections starting at $199 a month.17 By offering compounded GLP-1s, eligible customers can access medications with the same active ingredients as popular brands like Ozempic and Wegovy, bypassing the supply shortages and high costs associated with these branded drugs.18 According to the Food and Drug Administration (FDA), approximately 70% of American adults are overweight or obese, and losing 5- 10% of body weight can significantly reduce health risks such as diabetes and cardiovascular disease.19

Robotics & Artificial Intelligence

Robotic Assisted Surgical Devices Are Gaining Wider Acceptance  

Intuitive Surgical received clearance from the FDA for a labeling revision for its da Vinci X and XI surgical robotic platforms, which are used in radical prostatectomy, a procedure to remove the prostate gland after a cancer diagnosis.20 The FDA’s decision confirms the legitimacy of Intuitive Surgical robotic procedures and paves the way for further advancements in robotic assisted surgical devices. Supporting the decision was real-world data from 2007 to 2014 that involved nearly 25,000 U.S. patients who underwent surgery for treatment-naïve prostate cancer. The patients showed comparable 5–10 year survival rates for both robotic-assisted and non-robotic radical prostatectomy procedures.21 Intuitive worked with the FDA, healthcare analytics company Aetion, and the National Evaluation System for Health Technology (NEST) to validate the real-world data.22

Cybersecurity

Industry Consolidation Continues as AI Presents New Opportunities

The rapidly evolving enterprise technology landscape, driven by digital transformation and AI advancements, poses significant cybersecurity challenges. To enhance their security operations, thwart threats, and expedite incident response with advanced AI tools, cybersecurity leader Palo Alto Networks (PANW) and technology stalwart IBM entered a new partnership. Under the agreement, IBM will integrate its internal security solutions with PANW, making PANW its preferred cybersecurity partner for network, cloud, and security operations centers (SOC).23 PANW will acquire IBM’s QRadar SaaS platform, renowned for its threat detection and compliance capabilities, and transition existing QRadar clients to Cortex XSIAM, its next-generation SOC platform powered by AI.24 Additionally, PANW will integrate IBM’s watsonx large language models into Cortex XSIAM to further strengthen its cybersecurity solutions.25 And, IBM will train more than 1,000 of its security consultants on migration, adoption, and deployment of PANWs products, enhancing IBM’s leadership in cybersecurity consulting.26 This alliance underscores the industry’s shift towards consolidating to provide comprehensive end-to-end solutions that are underpinned by AI.

THE NUMBERS

The following charts examine returns and sales growth expectations by theme, based on their corresponding indices.

KEEP UP WITH THE LATEST RESEARCH FROM GLOBAL X

To learn more about the disruptive themes changing our world, read the latest research from Global X, including:

ETF HOLDINGS AND PERFORMANCE

To see individual ETF holdings and current performance across the Global X Thematic Growth Suite, including information on the indexes shown, click these links:

Appendix: Thematic Expected Sales Growth Graph Indices

AgTech & Food Innovation: Solactive AgTech & Food Innovation Index

Aging Population: Indxx Aging Population Thematic Index

Artificial Intelligence & Technology: Indxx Artificial Intelligence & Big Data Index

Autonomous & Electric Vehicles: Solactive Autonomous & Electric Vehicles Index

Blockchain: Solactive Blockchain Index

Clean Water: Solactive Global Clean Water Industry Index

CleanTech: Indxx Global CleanTech Index

Cloud Computing: Indxx Global Cloud Computing Index

Cybersecurity: Indxx Cybersecurity Index

Data Center & Digital Infrastructure: Solactive Data Center REITs & Digital Infrastructure Index

Defense Tech: Global X Defense Tech Index

E-Commerce: Solactive E-commerce Index

FinTech: Indxx Global FinTech Thematic Index

Genomics: Solactive Genomics Index

Hydrogen: Solactive Global Hydrogen Index

Internet Of Things: Indxx Global Internet of Things Thematic Index

Lithium & Battery Technology: Solactive Global Lithium Index

Millennial Consumer: Indxx Millennials Thematic Index

PropTech: Global X PropTech Index

Renewable Energy Producers: Indxx Renewable Energy Producers Index

Robotics & Artificial Intelligence: Indxx Global Robotics & Artificial Intelligence Thematic Index

Social Media: Solactive Social Media Total Return Index

Solar: Solactive Solar Index

Telemedicine & Digital Health: Solactive Telemedicine & Digital Health Index

U.S. Infrastructure: Indxx U.S. Infrastructure Development Index

Video Games & Esports: Solactive Video Games & Esports Index

Wind Energy: Solactive Wind Energy Index

Category: Articles

Topics: Consumer Economy, Macroeconomic, Physical Environment & ESG, Thematic

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The companies in which the Disruptive Technology Funds invest may be subject to rapid changes in technology, intense competition, rapid obsolescence of products and services, loss of intellectual property protections, evolving industry standards and frequent new product productions, and changes in business cycles and government regulation.

Data Center REITs and Digital Infrastructure Companies are subject to risks associated with the real estate market, changes in demand for wireless infrastructure and connectivity, rapid product obsolescence, government regulations, and external risks including natural disasters and cyberattacks.

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Shares of ETFs are bought and sold at market price (not NAV) and are not individually redeemed from the Fund. Brokerage commissions will reduce returns. Beginning October 15, 2020, market price returns are based on the official closing price of an ETF share or, if the official closing price isn’t available, the midpoint between the national best bid and national best offer (“NBBO”) as of the time the ETF calculates current NAV per share. Prior to October 15, 2020, market price returns were based on the midpoint between the Bid and Ask price. NAVs are calculated using prices as of 4:00 PM Eastern Time. The returns shown do not represent the returns you would receive if you traded shares at other times.

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