The Next Big Theme: January 2024

Electric Vehicles

Carmakers Ready to Electrify 2024

Strong 2023 sales from Tesla and BYD along with breakthroughs from Honda in early 2024 set the tone for another promising year for the electric vehicle (EV) sector. Tesla delivered a robust 1.8 million vehicles in 2023 and BYD continued its ascent by delivering 1.5 million, including a record 526,409 in Q4 2023.1 At the 2024 Consumer Electronics Show (CES), Honda made a significant splash with the unveiling of its innovative 0 Series, including the Saloon sedan and Space-Hub minivan, scheduled for a North American launch in 2026.2 This series represents Honda’s pivot to in-house EV development and features advancements such as e-axles, steer-by-wire systems, and over 300 miles of range per charge.3 Potentially adding to the impact of milestones like these is a revision to U.S. policy that introduces enhanced tax credits, including instant rebates to facilitate easier consumer access to EVs.4 This legislative shift is anticipated to catalyze further growth in the EV market.

Artificial Intelligence

Al Makes its Way to the Keyboard

Microsoft is redefining the relationship between artificial intelligence (AI) and personal computing by introducing a dedicated Copilot key on Windows 11 laptops.5 This key, which replaces the Menu key, provides users with direct access to Microsoft’s Copilot AI service, highlighting the company’s deep integration of AI, from its Azure servers to individual PCs. Google introduced an advanced version of its Bard AI service, expected to be available through a paid subscription to Google One.6 Powered by the cutting-edge large language model Gemini Ultra, Bard Advanced is a significant upgrade over the current Gemini Pro version.7 Notably, it offers advanced math and reasoning skills. Other recent AI innovations from Google include a feature codenamed Motoko, which might allow users to create custom bots, and a “power up” feature that augments user prompts in Bard. Additionally, a new “tasks” tab and customizable backgrounds for Bard prompts may be forthcoming. Features like these highlight the evolution of AI services in an increasingly competitive market.

Metaverse & Internet of Things

Mixed Reality Aims for Accessibility

Qualcomm announced its Snapdragon XR2+ Gen 2 chip, which will be used in Samsung and Google’s forthcoming mixed reality (MR) devices.8 The Snapdragon XR2+ Gen 2, an evolved version of the XR2 Gen 2 chip used in Meta’s Quest 3, offers advanced features like 4.3K resolution, a major leap forward in XR productivity and immersive entertainment.9 The chip can support Android applications, which suggests the devices may be offered at a more accessible price point than Apple’s $3,499 Vision Pro headset.10 In response to these new market dynamics, Meta reduced the price of its Quest 2 virtual reality (VR) headset to $250.11 This pricing strategy extends to the 128GB and 256GB models, including refurbished units and accessories.12 With its already favorable initial launch price, the Quest 2’s new price point may solidify its appeal to VR newcomers, bolstered by a vast array of VR titles.

Aging Population

Digital Solutions Reshaping Patient Care

The launch of Eli Lilly’s digital platform LillyDirect is expected to enhance patient access to the company’s medications, including Zepbound™, which recently received Food and Drug Administration (FDA) approval.13 Part of the GLP-1 agonists class, Zepbound™ is a weight management therapy.14 LillyDirect’s debut, along with the company’s partnership with weight loss telehealth service Form Health, aligns with the broader shift of healthcare embracing digital solutions for better patient care. Medtronic’s advancements in cardiac care represent another aspect of technology-driven innovation in healthcare. The European approval of the company’s latest leadless pacemakers, Micra AV2 and VR2, heralds a new era in cardiac treatment.15 These devices, distinguished by their compact size, extended battery life, and minimally invasive implantation, are tailored to enhance patient comfort and improve clinical outcomes.

Disruptive Materials

Copper and Zinc Exploration Updates

Disruptive technologies require metals, and recent developments illustrate the continued demand for zinc, copper, and other metals. Canada’s Barrick Gold and Chile’s Antofagasta formed Minera El Encierro, a joint venture for copper and metal exploration in Chile’s Atacama region.16 The initiative involves a $95 million investment to set up 60 drilling platforms across 9,400 hectares. Expected to last five years, the project aims to explore an area with promising copper-gold-molybdenum porphyry deposits, only 15% of which has been drilled.17 Barrick Gold is also looking to expand its copper production through investments in Pakistan’s Reko Diq mine and Zambia’s Lumwana super pit.18 The company wants to double its copper output by 2031. Also, the company is considering an acquisition of First Quantum, which recently closed its flagship mine in Panama.19 Following a pause due to low zinc prices, Sweden’s Boliden AB is negotiating to restart its Tara zinc operation in Ireland this year.20 Also, Boliden is increasing production capacity at its Odda zinc smelter in Norway.21 In Canada, Amarc Resources, in partnership with Boliden Mineral Canada, is planning a major drilling program expansion at the DUKE Copper-Gold District in British Columbia for 2024.22

Data Centers & Cloud Computing

Enterprises Set to Benefit from Hybrid Cloud Partnerships

IBM is partnering with American Tower to accelerate the deployment of hybrid, multi-cloud computing at the edge, enhancing cloud capabilities in IBM’s Access Edge Data Centers. A leader in communications real estate with a vast network of data centers, American Tower will integrate IBM’s hybrid cloud platform and automated systems to create an edge cloud across its locations.23 This initiative aims to provide enterprises with flexible application deployment options, enabling faster, more secure data processing near the data source. Cirrascale Cloud Services announced a partnership with Qualcomm to incorporate the Qualcomm Cloud AI 100 into its AI Innovation Cloud.24 This AI inference accelerator is tailored for generative AI, large language models (LLMs), and computer vision applications, a significant advancement in cloud-based AI processing. Qualcomm’s introduction of the Cloud AI 100 further strengthens its position in the AI inference market. This move aligns with Qualcomm’s strategy to expand into the AI-enabled edge market.

THE NUMBERS

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

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To learn more about the disruptive themes changing our world, read the latest research from Global X, including:

ETF HOLDINGS AND PERFORMANCE:

To see individual ETF holdings and current performance across the Global X Thematic Growth Suite, including information on the indexes shown, click these links:

Appendix: Thematic Expected Sales Growth Graph Indices

AgTech & Food Innovation: Solactive AgTech & Food Innovation Index

Aging Population: Indxx Aging Population Thematic Index

Artificial Intelligence & Technology: Indxx Artificial Intelligence & Big Data Index

Autonomous & Electric Vehicles: Solactive Autonomous & Electric Vehicles Index

Blockchain: Solactive Blockchain Index

Cannabis: Cannabis Index

China Biotech Innovation: Solactive China Biotech Innovation Index

Clean Water: Solactive Global Clean Water Industry Index

CleanTech: Indxx Global CleanTech Index

Cloud Computing: Indxx Global Cloud Computing Index

Cybersecurity: Indxx Cybersecurity Index

Data Center REITs & Digital Infrastructure: Solactive Data Center REITs & Digital Infrastructure Index

Defense Tech: Global X Defense Tech Index

Disruptive Materials: Solactive Disruptive Materials Index

E-Commerce: Solactive E-commerce Index

FinTech: Indxx Global FinTech Thematic Index

Genomics: Solactive Genomics Index

Green Building: Solactive Green Building Index

Health & Wellness: Indxx Global Health & Wellness Thematic Index

Hydrogen: Solactive Global Hydrogen Index

Internet Of Things: Indxx Global Internet of Things Thematic Index

Lithium & Battery Technology: Solactive Global Lithium Index

Metaverse: Global X Metaverse Index

Millennial Consumer: Indxx Millennials Thematic Index

PropTech: Global X PropTech Index

Renewable Energy Producers: Indxx Renewable Energy Producers Index

Robotics & Artificial Intelligence: Indxx Global Robotics & Artificial Intelligence Thematic Index

Social Media: Solactive Social Media Total Return Index

Solar: Solactive Solar Index

Telemedicine & Digital Health: Solactive Telemedicine & Digital Health Index

U.S. Infrastructure: Indxx U.S. Infrastructure Development Index

Video Games & Esports: Solactive Video Games & Esports Index

Wind Energy: Solactive Wind Energy Index