Thanks to profound leaps in digital innovation, companies such as Nvidia Corp NVDA and Microsoft Corp MSFT managed to secure the vaunted $3 trillion valuation. Of course, much of this achievement has to do with their advancement of artificial intelligence. What was once the exclusive domain of science fiction novels and films has quickly become an everyday reality.

The proof is in the numbers. Although Nvidia has gotten off to a rocky start in 2025, over the past five years, NVDA stock has gained more than 1,762% of equity value. From a capital gains perspective, Microsoft hasn't been nearly as robust. Still, MSFT stock more than holds its own, gaining over 161% in the aforementioned time period.

On a more fundamental note, a report released by Cognizant Impact last year projected that generative AI may have an estimated $1 trillion impact on the U.S. economy within the next ten years. To be fair, this forecasted economic boost comes with the disruption of contemporary jobs. Nevertheless, the accelerated productivity that AI could bring to the table may deliver a net positive.

At the same time, technological innovation doesn't occur in a vacuum. Since the beginning of this year, the tech-focused Nasdaq Composite index has slipped almost 8%. This performance is noticeably worse than the benchmark S&P 500, which is down less than 4% during the same timeframe. Primarily, the Trump administration's tariffs and subsequent trade wars against key economic partners have spooked many investors.

To be sure, contrarian investors may look at the red ink in the tech space as a discounted opportunity. On the other hand, the rise of safe-haven assets – particularly physical gold bullion – raises concerns for some. Gold doesn't generate earnings nor does it pay dividends. People tend to invest in the yellow metal due to the fear trade or the anticipation of negative circumstances materializing.

The Direxion ETFs: With market sentiment pulling investors in opposite directions, this framework offers relevance for AI-focused exchange-traded funds. Specifically, bullish investors may consider the Direxion Daily AI and Big Data Bull 2X Shares AIBU. For those who are feeling pessimistic about the tech arena, the Direxion Daily AI and Big Data Bear 2X Shares AIBD could be of interest.

According to the financial service provider's website, AIBU seeks the daily investment results, before fees and expenses, of 200% of the performance of the Solactive U.S. & Big Data Index. AIBD seeks 200% of the inverse performance of the said index.

At the core, both ETFs offer convenience for retail traders who seek the specialized characteristics of leverage or short trades. Without leveraged or inverse ETFs, such investors would have to resort to options trading, which may introduce unique risks and complexities. With Direxion ETFs, traders can buy and sell shares (or units) much like any other publicly traded asset.

However, it's worth noting that leveraged and inverse ETFs are designed for exposure lasting no longer than one day. Anything beyond this recommended hold may encounter unexpected performance drags due to the daily compounding of volatility.

The AIBU ETF: Unsurprisingly given the enormous interest in AI, the AIBU ETF has gained almost 17% since its debut in May last year. However, since the start of this year, the fund is down roughly 15%.

• Despite earlier momentum, AIBU finds itself well below its 50-day moving average and is also short of its 200 DMA.
• Lack of acquisition volume in recent sessions is a concern, with AIBU appearing to form a bearish pennant formation. To break the implications of this pattern, the bull fund likely needs immediate support.

The AIBD ETF: Due to earlier demand for machine-intelligence-related investments, the AIBD ETF has struggled since its debut. Nevertheless, on a year-to-date basis, the bear fund finds itself up almost 9%.

• Throughout 2024, circumstances for the AIBD ETF look incredibly poor, with its 50 DMA and 20-day exponential moving average applying resistance.
• Since the second half of February, though, circumstances have shifted, with AIBD rocketing above the aforementioned moving averages. Presently, the price action appears to be in consolidation before a potential move higher.

Featured photo by Gerd Altmann on Pixabay.

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