iShares Global Tech ETF (IXN): Capitalizing on AI Growth Amid Sector Volatility

The tech sector has been a rollercoaster in 2025, with AI-driven stocks soaring while legacy players and semiconductor-focused funds falter. Amid this turbulence, the iShares Global Tech ETF (IXN) stands out as a compelling buy, powered by a 34.54% gain since its April pivot and robust technical signals. This article dissects the ETF's strengths, contrasts its trajectory with hedge fund exodus from semiconductors, and underscores its role as a diversified play on tech's next wave.

Technical Momentum: A Bullish Crossover and Strong Support

IXN's technical picture is unequivocally bullish. Since April, the ETF has formed a “rising trend channel,” with its short-term moving average (SMA) crossing above the long-term average, a classic bullish crossover signaling upward momentum. As of June 16, 2025, the ETF was classified as a “Strong Buy Candidate” (score: 7.041), backed by a 6.30% gain year-to-date and an 8-out-of-10-day winning streak.

Key Technicals to Watch:
- Support Levels: $91.89 (near-term), $87.16 (medium-term), and $84.42 (long-term).
- Volatility: Daily swings average 1.24%, with a recommended stop-loss at $89.99 (-3.58% from current price).
- Forecast: Analysts project a 31.56% rise over three months, targeting a price range of $116.72–$126.93 by September 2025.

Fundamental Catalysts: AI-Driven Growth and Diversification

IXN tracks the S&P Global 1200 Information Technology Index, offering exposure to 1200+ global tech firms, with 87% U.S. bias but meaningful global reach. Its top holdings—Apple, Microsoft, NVIDIA, and Oracle—are core to AI's infrastructure, cloud, and semiconductor demand.

• Oracle's Stifel Upgrade: Stifel's Buy rating on Oracle (and its 19% upside target) highlights cloud growth's role in tech's future. Oracle's cloud revenue is expected to grow at high 30% rates through 2027, a direct tailwind for IXN.
• Resilience of the “Magnificent 7”: While four of the Magnificent 7 (Apple, Tesla, Alphabet, Amazon) lagged YTD, Microsoft (+13%) and NVIDIA (+6%) outperformed. These stocks, which make up ~40% of IXN's holdings, anchor its AI-driven narrative.

Contrasting with Semiconductor Sector Weakness

While IXN thrives, semiconductors are under pressure. Hedge funds have slashed exposure to the sector, reducing allocations to 16.4%—a five-year low—due to valuation concerns, trade wars, and delayed AI monetization. The VanEck Semiconductor ETF (SMH) has underperformed IXN by ~20% since April, highlighting the risks of sector-specific bets.

Why IXN is Safer:
- Diversification: Avoids overexposure to volatile semiconductors while capturing AI's broader impact on software, cloud, and enterprise tech.
- Defensive Plays: Holdings like Palantir (cybersecurity) and ServiceNow (AI-driven IT) align with Coatue's “Phase 3” winners—companies turning AI into revenue.

Stifel's IGT/BRSL Buy Rating: A Microcosm of Tech's Evolution

Stifel's Buy rating on IGT (now BRSL) underscores a broader theme: tech's shift from hardware to services. Despite IGT's near-term earnings misses, its $4.05 billion divestiture of its gaming unit to Apollo Global Management has unlocked $1.1 billion in shareholder returns (special dividend + buybacks). This mirrors IXN's focus on cash-rich, capital-efficient tech firms.

Risk Management: Low Daily Volatility, High Upside

IXN's low daily risk profile (volatility <1.5%) contrasts sharply with the sector's swings. Its 9.55% buffer between current prices and key support provides a margin of safety. Even if near-term dips occur—say, due to macro uncertainty—support at $84.42 offers a buying opportunity.

Investment Thesis: Buy IXN for AI's Long Game

Why Buy Now?
1. Technicals: Bullish trend, strong support, and a 31.56% annualized upside.
2. Fundamentals: Anchored in AI's winners (Oracle, Microsoft) and shielded from semiconductor volatility.
3. Valuation: Trading at ~25x forward earnings—reasonable given its growth profile.

Action Items:
- Buy IXN for a 3–6-month horizon, targeting $116–$127 by September.
- Stop-Loss: Set at $89.99 to manage downside risk.
- Hedge: Pair with a small short position in SMH if semiconductor risks escalate.

Final Take

The tech sector's volatility isn't a weakness—it's a filter. IXN's blend of technical strength, AI-driven fundamentals, and diversified exposure makes it a standout bet for investors willing to ride tech's next wave. As Stifel's analysts remind us: “Let the trend be your friend.”