Buying this exciting FTSE stock would offer me access to the AI revolution!

Our writer explains how this FTSE stock gives her exposure to leading stocks at the forefront of the artificial intelligence (AI) boom.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

artificial intelligence investing algorithms

Image source: Getty Images.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Many businesses are vying for domination in the artificial intelligence (AI) race. However, I could buy just one FTSE stock that could help me build wealth off the back of all of them!

The stock in question is Baillie Gifford US Growth Trust (LSE: USA). I’m looking for the best ways to offer my portfolio exposure to the potentially lucrative AI revolution.

Here’s why I’m seriously considering buying some shares in this trust for my holdings!

US growth stocks

As the name suggests, Baillie Gifford US Growth Trust is an investment trust focusing on US-listed growth stocks.

My attention was drawn to it due to its multiple positions in some of the best and emerging AI tech stocks across the pond.

To give you a flavour of some of its holdings, these include SpaceX, Amazon, Shopify, Tesla, Meta Platforms, and more. Not a bad line up, if you ask me!

Some of these businesses are at the forefront of cutting edge AI tools, which could revolutionise the way we work, connect, communicate, shop, and lots more.

The shares are up a whopping 43% over a 12-month period from 139p at this time last year, to current levels of 199p.

Notable risks

There are certain risks that could hinder how well the trust performs. A big part of this stock picking. For example, I noted that Baillie Gifford recently sold shares in Mastercard and Alphabet. These are two of the leading businesses in the world in their respective industries.

At first glance, there could be potentially endless AI-related tools to enhance these businesses and performance. Plus, is there a stock that could outdo all those in the trust that Baillie Gifford hasn’t procured yet?

I have to caveat this by saying those picking the stocks for the trust have a good track record, and know what they’re doing, but this is a risk nevertheless.

Next, AI isn’t a brand new type of tech. It’s been around for some time, but seems to have risen in popularity due to tech moving on rapidly in recent years. Investors are still unsure of it. This is probably why the trust has been outperformed by more traditional ETFs like those tracking the S&P 500 index. A lack of progress or investors not understanding what they’re buying could keep returns lower than expected or anticipated.

Enticing valuation and my verdict

I reckon one of the best ways to derive a valuation for Baillie Gifford US Growth Trust is by comparing the current share price to the net asset value (NAV). At present, the share price is trading at a discount of just over 12%. This signals the stock could be a bargain right now.

I’ve been pondering how best to capitalise on the AI revolution. Buying shares in singular obvious leading tech stocks could be one way to go, but with added risk. Some examples of these include Nvidia and Meta Platforms.

However, buying shares in a trust with exposure to many major players might be the way to go for me. The next time I have some spare cash, I’ll snap up some of the shares.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Sumayya Mansoor has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing Articles

Surely, the Rolls-Royce share price can’t go any higher in 2025?

The Rolls-Royce share price was the best performer on the FTSE 100 in 2023 and so far in 2024. Dr…

Read more »

A young woman sitting on a couch looking at a book in a quiet library space.
Investing Articles

Here’s how an investor could start buying shares with £100 in January

Our writer explains some of the things he thinks investors on a limited budget should consider before they start buying…

Read more »

Investing Articles

Forget FTSE 100 airlines! I think shares in this company offer better value to consider

Stephen Wright thinks value investors looking for shares to buy should include aircraft leasing company Aercap. But is now the…

Read more »

Investing Articles

Are Rolls-Royce shares undervalued heading into 2025?

As the new year approaches, Rolls-Royce shares are the top holding of a US fund recommended by Warren Buffett. But…

Read more »

Investing Articles

£20k in a high-interest savings account? It could be earning more passive income in stocks

Millions of us want a passive income, but a high-interest savings account might not be the best way to do…

Read more »

Investing Articles

3 tried and tested ways to earn passive income in 2025

Our writer examines the latest market trends and economic forecasts to uncover three great ways to earn passive income in…

Read more »

Investing Articles

Here’s what £10k invested in the FTSE 100 at the start of 2024 would be worth today

Last week's dip gives the wrong impression of the FTSE 100, which has had a pretty solid year once dividends…

Read more »

Investing Articles

UK REITs: a once-in-a-decade passive income opportunity?

As dividend yields hit 10-year highs, Stephen Wright thinks real estate investment trusts could be a great place to consider…

Read more »