An exchange-traded fund managed by artificial intelligence has bought a large number of Tesla Inc (NASDAQ:TSLA) shares. What makes the purchase especially significant is the AI’s previous track record in predicting movements in the automaker’s stock.
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AI fund loads up on Tesla stock
The Qraft AI-Enhanced U.S. Large Cap Momentum ETF, which trades under the ticker symbol "AMOM" on the New York Stock Exchange, bought approximately $1.4 million worth of Tesla shares the first week of this month. The fund dumped all of its Tesla stock when the shares were trading at record highs and then avoided the company until now.
The fund now has 6% of its assets in Tesla stock, according to MarketWatch. The automaker is the Qraft ETF's third-biggest holding after Amazon Inc (NASDAQ:AMZN) and Facebook Inc (NASDAQ:FB). The fund has successfully predicted Tesla's stock movements and had a strong year in 2020.
So far this year, the ETF has returned 4%, while last year, it gained 55%. Its benchmark, the S&P 500 Momentum ETF, has returned 35% since May 2020.
Details on AMOM
The fund has been traded on the New York Stock Exchange since May 2019, and it's an actively managed portfolio driven by AI. AMOM tracks 50 large-cap U.S. stocks and repositions its weightings every month. As the name suggests, the ETF follows a momentum strategy.
The artificial intelligence that drives its stock picks uses movements within the market to make decisions about what to buy, sell or reweight. The AI scans the market and predicts stock movements using various patterns that demonstrate momentum in the market.
Tesla hasn't sold any bitcoin
In other Tesla news, CEO Elon Musk has clarified that the automaker hasn't sold any bitcoin. On Sunday, he responded to Twitter user @CryptoWhale, who said, "Bitcoiners are going to slap themselves next quarter when they find out Tesla dumped the rest of their #Bitcoin holdings. With the amount of hate @elonmusk is getting, I wouldn't blame him."
Musk's response was simply, "Indeed."
Many bitcoin enthusiasts took that to mean that the automaker has already sold its bitcoin or is planning to sell it very soon. Tesla reversed court on bitcoin last week, saying that it would no longer accept the cryptocurrency as payment for its vehicles, citing the impact of bitcoin mining on the environment.
Early this morning, Musk tweeted a clarification, saying that the automaker hasn't sold any bitcoin. Tesla did sell some during the first quarter, gaining $101 million on the sales.
Tesla is part of the Entrepreneur Index, which tracks 60 of the largest publicly traded companies managed by their founders or their founders' families.
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