The Next Big Theme: August 2023

U.S. Infrastructure Development

IIJA’s Impact Persistent

Infrastructure is the driving force behind recent positive trends in the construction industry. In June, the construction backlog remained at a two-year high of 8.9 months, marking the third straight month of outstanding projects awaiting initiation.1 Eighteen months after the $1.2 trillion Infrastructure Investment and Jobs Act (IIJA) was passed, this backlog suggests potential insulation for the construction industry.2 Also, better-than-expected Q2 2023 GDP bolstered the outlooks for construction and manufacturing with supply shortages improved and price and wage pressures easing.3 Public construction company CEOs share this sentiment, as they expect peak infrastructure spending in four years.4 Although ABC’s Construction Confidence Index for June showed a dip in sales, profit margins, and staffing, all three metrics remained above 50, implying growth over the next six months.5 Recent examples of the IIJA in action include the California Transportation Commission’s $2 billion investment in the state’s transportation infrastructure.6 More than $571 million of that investment originates from the IIJA.7

Social Media

Platforms Tap Into Consumer Loyalty for Growth

The growth prospects of social platforms continues to climb, and recent price increases reflect their potential. Spotify raised the price of its premium service by $1 to $10.99, marking its first price adjustment since 2011.8 Spotify also raised prices for its subscription tiers Duo, Family, and Student.9 YouTube increased its individual YouTube Premium plan by $2 to $13.99 per month and YouTube Premium Music by $1 to $10.99 per month.10 Apple and Amazon also raised prices for their music subscription offerings over the past year.11 Feature enhancements can be another source of growth. Despite Threads’ initial rapid growth tapering off, Meta remains committed to developing the platform. Recent updates to Threads include a Following tab that enables users to access threads from followed accounts in chronological order, deviating from algorithm-driven suggestions.12 Also, in response to user demand, Threads is set to add a desktop-friendly web version and a full search feature.13


First Solar Leads the U.S. Solar Charge

First Solar announced plans to build its fifth manufacturing facility in the United States and increase its annual capacity by 3.5 gigawatts (GW) by 2026.14 This U.S.-based cadmium telluride thin-film module manufacturer will invest $1.1 billion into its forthcoming Series 7 solar module production facility.15 When complete, Series 7 modules are projected to constitute over two-thirds of the company’s annual U.S. capacity.16 First Solar expects its global annual module production capacity to reach 25GW, including 14GW within the United States, by 2026.17 With this new facility, First Solar’s capital investment in the past year totals over $2.8 billion and is expected to bring 7.9GW of additional U.S. manufacturing capacity.18 These updates follow The Department of the Interior’s Bureau of Land Management recently held auction for the advancement of large-scale solar energy projects in Nevada. The high bids reached $105.15 million, potentially adding nearly 3GW of renewable energy to the grid.19 This stands as the agency’s most successful onshore renewable energy auction to date.20

FinTech & Millennial Consumers

FinTech and Big Tech Show Synergy

The payments landscape is ripe with new and enhanced consumer services. Fiserv unveiled a collaboration with Amazon that enables eligible debit and credit cardholders to convert uChoose Rewards® points into purchases on and the Amazon mobile app.21 Over 200 financial institutions are enrolled, and hundreds more are expected to provide this redemption feature by year-end.22 PayPal introduced PayPal Pay Later to Microsoft customers in several countries, including the Australia, Germany, France, Italy Spain, the United Kingdom, and the United States.23 Also, U.S. customers will soon be able to use PayPal’s Venmo in the Microsoft Store, an extension of an existing partnership focused on Xbox purchases.24 Apple Pay helped Apple to record-breaking revenue within the payment services category in Q2 2023.25 Recent Apple Card success includes its Savings account, which exceeded $10 billion in only about four months since its debut in April.26

Artificial Intelligence

Generative AI Intersects with User Experience

Pioneers in the field of generative AI are consistently refining their offerings to elevate user experiences across a multitude of domains. Google is updating its AI-powered Search Generative Experience (SGE) with images and videos in the summary box above search results.27 With the SGE feature enabled in Search Labs, users can expect a richer multimedia display for search outcomes. Still in the experimental phase, Google continues to refine this feature, aiming for faster presentation of the summary box and more contextual information for the linked content. With Meta’s generative AI-based AudioCraft, users can create musical and audio compositions.28 AudioCraft models MusicGen and AudioGen tools use text inputs to generate new audio content, while its EnCodec model enhances music quality through reduced artifacts.29 Microsoft rolled out the Windows Copilot Preview to Windows Insiders via a controlled feature release.30 The initial preview prioritizes an integrated User Interface (UI) experience, with forthcoming previews set to show additional functionalities.

Internet of Things

Semiconductors Top Government To-Do Lists

Global semiconductor sales surged to $124.5 billion in Q2 2023, a 4.7% increase from Q1.31 June sales increased 1.7% from May to $41.5 billion.32 Continued sales strength shows why governments are so keen to develop the industry. In the United Kingdom, the government aims to create the next generation of scalable semiconductor companies, helped by initiatives like the Silicon Catalyst-led pilot incubator program, which offers startups contract, funding, and team building training.33 China aims for semiconductor self-sufficiency amid persistent trade sanctions. Working towards that goal is the National Natural Science Foundation of China (NSFC), which introduced a program to allocate up to US$6.4 million to as many as 30 research projects focused on “chiplet” technology. Chiplets are small, well-defined integrated circuits that can be combined with other chiplets.34 At the end of 2022, India’s government announced a $10 billion incentive plan to develop the country’s semiconductor industry. At the SemiconIndia conference, top U.S. semiconductor firms Micron, Cadence, Applied Materials, and AMD lauded India’s technological prowess, emphasizing their investments in the country and new ventures.35


The following charts examine returns and sales growth expectations by theme, based on their corresponding ETFs.


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