AI-Powered ETF Slashes Tech Exposure, Pivots to Financials Amid Market Turbulence
Staff Editor AI-Driven ETF Shifts Strategy Amid Market Volatility
Qraft Technologies’ AI-Enhanced US Large Cap Momentum ETF (AMOM) is adjusting its investment strategy in response to ongoing market volatility, after outperforming the S&P 500 with a 38% gain last year. The fund, which achieved success by investing in growth stocks such as Nvidia, Tesla, and Palantir, is now significantly reducing its tech holdings.
AMOM utilizes a machine-learning methodology called clustering to analyze stock price trends, focusing on momentum to predict future stock performance. The fund rebalances monthly based on its AI-driven insights. However, the tech-heavy concentration that drove its success in 2024 has resulted in a 16% decline year-to-date in 2025.
In response to changing market conditions, the AI model has decreased the fund’s tech sector exposure from over 40% last year to 26% currently. The fund is now diversifying into financials and communications services, acquiring stocks like Wells Fargo and Morgan Stanley.
Despite the overall reduction in tech holdings, AMOM retains significant positions in some of the “Magnificent Seven” stocks, including Nvidia, Meta Platforms, and Tesla. Nvidia remains a key holding despite market challenges, with the fund expressing optimism for long-term growth in AI.
Tesla’s stock has experienced a 48% decline since December, but the fund maintains a 6% allocation. The AI algorithm’s history of successful, unconventional stock picks suggests confidence in this decision. Tesla continues to garner support from Wall Street, with Morgan Stanley highlighting its potential in AI and robotics.
As market conditions evolve, investors will be watching closely to see how AMOM’s AI-driven strategy adapts and performs in the face of ongoing economic uncertainties.
