WCLD Down 30% as Growth Investors Finally Get Cold Feet About AI Spend

"Cloud computing stocks are trading like they've hit a wall. WisdomTree Cloud Computing Fund ( NASDAQ:WCLD) dropped 30.5% over the past year to $28.60, a stark reversal from the sector's pandemic-era dominance. This divergence from the S&P 500 ( NYSEARCA:SPY)'s 14.4% gain reflects investor skepticism about whether emerging cloud software companies can maintain their business models as AI reshapes the technology landscape."

"This ETF provides exposure to emerging cloud computing companies through the BVP Nasdaq Emerging Cloud Index. The portfolio spreads risk across 65 positions, with MongoDB ( NASDAQ:MDB) as its largest holding at just 2.81% - meaning no single company dominates performance. The fund charges a 0.45% expense ratio, which is reasonable for accessing this specialized segment of the cloud computing market. The return engine is straightforward: growth in recurring subscription revenue from companies selling cloud-based software and infrastructure."

"The fund's structure reflects this concentration risk, holding 65 positions almost entirely in Information Technology at 92.1%. This heavy sector tilt amplifies both the opportunities and risks from AI-driven transformation. Some institutional investors see opportunity in the wreckage. Bank of America and Tower Research increased positions in early January 2026 despite negative sentiment. The thesis: software companies are rapidly integrating AI into their products, and the current sell-off represents a valuation reset"

WisdomTree Cloud Computing Fund (WCLD) lost 30.5% over the past year to $28.60, reversing prior sector strength while the S&P 500 gained 14.4%. Investors question whether emerging cloud software companies can preserve business models and competitive positions as AI reshapes product dynamics. The ETF holds 65 mostly information-technology positions, with 92.1% sector exposure and MongoDB as the largest holding at 2.81%, creating concentration risk. The fund tracks the BVP Nasdaq Emerging Cloud Index and charges a 0.45% expense ratio. Returns rely on recurring subscription revenue, strong retention, and margin expansion as companies scale. Some institutions bought shares, viewing the sell-off as a valuation reset driven by AI integration.

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