Utilities are almost as big an AI play as tech: Strategist
Although the tech sector (XLK) has suffered in recent weeks, there are plenty of investing strategies and plays that could help investors find their footing amid trending volatility. Morningstar Chief US Market Strategist David Sekera joins Market Domination to give insights into current market trends. Sekera points out how utilities (XLU) may be an undervalued sector: "On a valuation basis, [utilities were] pretty much as undervalued according to our valuations as they had been over the past decade. But that sector is up about 22% year to date, or even more than that off of those lows from last October. So, at this point, I think it's time to move to an underweight there." Tying utility demands back into AI, Sekera finds utilities to be "the big story this year" as the sector becomes more like a "second derivative of AI. "Of course, electricity demand will be increasing as more AI comes out there because AI takes many times more power to run than traditional computing," Sekera says. For more expert insight and the latest market action, click here to watch this full episode of Market Domination. This post was written by Nicholas Jacobino