The Technology Gold Rush
Artificial intelligence stands on the brink of becoming not only a transformative force in modern life but also a lucrative opportunity. Analysts at Bank of America forecast that AI could inject a staggering $15.7 trillion into the global economy by 2030.
Hardware: The Backbone of Innovation
At the forefront of AI innovation is Nvidia, a company that designs cutting-edge chips vital for powering AI servers. Termed as the hottest AI stock, Nvidia has seen its shares skyrocket by over 260% in the past year, positioning itself as a essential player in the AI landscape.
The Critical Connection: Copper Unveiled
When exploring the fundamental components of AI technology, it’s easy to overlook the essential role of copper. The versatile metal serves as the connective tissue within integrated circuits, akin to the function of axons in the human brain. Moreover, copper plays a pivotal role in transmitting power throughout these circuits, showcasing its indispensable nature in the tech ecosystem.
Beyond AI chips, copper is a linchpin of the electrical grid, powering turbines, batteries, and wiring systems that ensure electricity distribution worldwide. The modern world’s functioning is intricately tied to the availability and utility of copper.
Supply vs. Demand: A Tug-of-War
The surge in AI, electric vehicles, and the global push towards decarbonization has propelled the demand for copper. Research from McKinsey & Company projects a spike in global demand to 36.6 million metric tons by 2031, a significant uptick from the current 25 million metric tonnes. Alarmingly, predictions indicate a potential supply deficit of 6.5 million metric tonnes by 2031, underscoring the pressing need for increased mining and recycling efforts.
Recently, key Chinese copper smelters agreed to slash production due to raw material shortages, underscoring the critical need for a concerted effort to address the impending supply shortfall.
The Investment Landscape: Seizing the Opportunity
Ivana Delevska and the team at Spear Invest recognize the tangible trends shaping the copper market. Spear Alpha ETF, their flagship fund, strategically invests across the AI value chain, covering a spectrum from AI-enabled companies like ZScaler, hardware producers like Nvidia, to upstream players in copper mining and processing such as Freeport-McMoRan and Teck Resources.
By embracing a comprehensive approach that extends far upstream from the tech domain, firms such as Spear Invest showcase a keen comprehension of the interconnectedness of the market. This strategy has proven successful, with SPRX witnessing a remarkable surge of approximately 70% over the past year.
