If you're tired of hearing about the same old AI chip stocks and cloud giants, JPMorgan has a different kind of AI trade for you. The bank's latest consumer-tech research shines a light on companies that are using artificial intelligence and digital platforms to shake up e-commerce, manufacturing, travel, and insurance. These aren't the usual suspects, but they might be the ones that benefit most from the digital transformation wave.
JPMorgan's top picks in this space are Shopify (SHOP) and Take-Two Interactive (TTWO), both of which the bank ranks as high-conviction investments. The bank also upgraded Clear Secure (YOU), Xometry (XMTR), and EverQuote (EVER) to Overweight. What ties these companies together? They're all leveraging digital transformation, AI-enabled products, and expanding marketplaces to improve their operating leverage.
For investors who want to ride this wave without picking individual stocks, there are ETFs that offer exposure to these themes. Here's a look at four funds that could help you play the digital transformation trade.
GENZ: The Closest One-ETF Match
If you want to capture JPMorgan's two biggest consumer-tech favorites in one shot, the VanEck Digital Native Economy ETF (GENZ) is a solid choice. This fund holds both Shopify and Take-Two, along with other companies that are benefiting from the shift toward digitally native businesses. Its portfolio spans e-commerce, gaming, online platforms, and other corners of the digital economy, making it a natural fit for JPMorgan's thesis.
What's interesting is that neither Shopify nor Take-Two is a traditional AI stock. Yet both are riding the technology-driven transformation of their industries. Shopify is using AI to help merchants run their online stores more efficiently, while Take-Two is leveraging AI in game development and player engagement. GENZ gives you a diversified way to bet on these kinds of digital-native winners.
PRNT: AI Meets Manufacturing
Xometry is a bit of a wildcard in JPMorgan's picks. The company runs a digital marketplace that connects businesses with manufacturing suppliers, and it uses AI and automation to make sourcing and procurement smarter. It's a great example of how AI is being applied to physical industries, not just digital ones.
To get exposure to Xometry, you can look at the ARK 3D Printing ETF (PRNT), which has held the stock at a meaningful weight. PRNT is an interesting second-order AI play. Instead of owning the companies that build AI infrastructure, you're investing in businesses that use AI to modernize manufacturing. It's a different angle on the AI trade, and one that could pay off as more industries adopt these technologies.
IHAK: The Digital-Identity Play
Clear Secure adds another dimension to JPMorgan's thesis. Its identity-verification platform sits at the crossroads of technology, travel, and digital security. As more of our lives move online, the need for secure digital identity is only going to grow.
The iShares Cybersecurity and Tech ETF (IHAK) offers exposure to Clear Secure along with a broader basket of cybersecurity and technology companies. This gives you a way to capture the digital-identity angle without making a single-stock bet. It's a diversified approach to a theme that's becoming increasingly important.
The Bigger ETF Opportunity
JPMorgan's five favorites span e-commerce, gaming, digital manufacturing, identity, and insurance technology. That's a lot of ground to cover, and no single ETF can replicate all of it. But that might be the point. The bank's picks highlight a second-generation AI trade, where the beneficiaries aren't necessarily the chipmakers or cloud giants, but the companies that are using AI to make existing industries faster, more digital, and more efficient.
For ETF investors, the opportunity is shifting from simply owning AI infrastructure to identifying the industries that are being transformed by it. Whether it's e-commerce, manufacturing, or cybersecurity, there are ETFs out there that can help you tap into these themes. The key is to think beyond the obvious AI names and look for the companies that are putting AI to work in the real world.
So, if you're looking to diversify your AI exposure, consider these ETFs. They offer a way to participate in the digital transformation wave without betting on a single stock. And who knows? The next big AI winner might not be a tech giant at all, but a company you've never heard of, quietly using AI to change its industry.
