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Palantir beats Q1 estimates on strong U.S. demand, lifts outlook. AI strength lifts ETFs like PLTW, IGV, SHLD despite valuation concerns.
The Trump administration's global trade policies are extremely unpredictable, with new import tariffs regularly imposed and others removed. The Supreme Court will rule on the legality of a large portion of President Trump's tariffs in the near future (potentially as early as Tuesday).
iShares U.S. Tech Independence Focused ETF (IETC) offers a unique tech exposure emphasizing U.S.-based infrastructure, enterprise software, and cybersecurity. IETC's methodology prioritizes technological independence and diversified market cap exposure, resulting in differentiated holdings and lower Magnificent 7 concentration than QQQ. Performance analysis shows IETC outperforms QQQ in most tech-led rallies, with only slightly higher drawdowns during market corrections.
Tariffs increase the cost of imported goods to support domestic manufacturing, and they are one of President Trump's favorite tools toward this end. However, tariffs can also threaten economic growth by increasing costs for consumers, which is why the stock market typically doesn't like them.
IETC's active, data-driven strategy and focus on US tech leaders have delivered strong outperformance versus peers and the S&P 500. Top holdings like Broadcom, NVIDIA, Microsoft, and Palantir are benefiting from robust AI demand, driving portfolio returns. The ETF boasts a low expense ratio, strong liquidity, and a superior Quant score, making it attractive for growth-focused investors.
IETC offers focused exposure to top US tech and AI leaders, with a relatively low expense ratio for a thematic ETF. We are bullish on the fund's top holdings—Broadcom, Nvidia, and Palantir—due to their strong AI leadership and growth prospects. Valuation analysis shows most top holdings are overvalued versus historical norms, with only Nvidia near fair value.
The S&P 500 (^GSPC -0.23%) has plunged by as much as 20% since hitting a record high just two months ago. President Donald Trump enacted sweeping tariffs on all of America's trading partners last week, and many countries responded with plans for retaliatory tariffs of their own, which is stoking fears of a global trade war.
I initiate coverage of iShares U.S. Tech Independence Focused ETF with a hold rating due to expected further downside and recession risks. IETC's strategy of investing in U.S.-focused tech companies is promising, but waiting for a market bottom-out is advisable to avoid potential losses. Despite the recent selloff, valuations remain above long-term averages, and technical indicators suggest limited recovery potential with high downside momentum.
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Transcripts source: company-published earnings calls. Speaker attribution and formatting are processed in-app.