A 4-day workweek could be coming as AI proliferates — and these companies could capitalize

Published Wed, Apr 17 20248:00 AM EDTUpdated Wed, Apr 17 20241:34 PM EDT

The four-day workweek isn't a reality for most companies — yet. But, although opinions are divided on whether a shorter workweek can become mainstream, many on Wall Street agree it could have wide-ranging implications for the economy — and open up new investment opportunities. Steven Cohen, a hedge-fund manager and the owner of the New York Mets, has already begun to invest in a four-day workweek. His 2023 investment in golf startup league TGL was partly informed by his conviction in a broader cultural shift toward a shorter workweek, he told CNBC. "I think I would have done the golf investment anyway because I think there's a longer-term thought, but my belief is a four-day workweek is coming," Cohen said on CNBC's "Squawk Box" earlier in April. Cohen isn't alone in forecasting a four-day workweek. Jefferies thinks artificial intelligence will make workers more efficient and eventually lead to a four-day workweek becoming the norm, according to a note from June 2023. Bank of America also expects the changing post-pandemic work landscape to result in a shorter workweek. The firm noted that Henry Ford "pioneered" the weekend from a typical six- to seven-day workweek in the early 1900s. Ford believed that giving his workers more days off would increase their leisure time, and, in turn, encourage them to buy more cars. His plan paid off, which led other companies to follow suit. "If automation helps free workers from mundane and repetitive tasks the future of work might tilt towards more leisure time," said BofA. "Just as we have labor-market policies to shape people's working lives today, we might also need 'leisure market policies' to shape how people spend their spare time in a more radical future of work." There has already been a shift away from five days in the office, thanks to remote work culture during the Covid-19 pandemic. Globally, there are already a total of 73 million digital jobs, according to the World Economic Forum. The institution forecasts global digital jobs to grow around 25% to 90 million by 2030. Increase in leisure European countries average far higher in annual holidays and vacations — France, for example, requires workers to take 30 days of paid vacation each year. European governments also have more productive "leisure market policies," according to Bank of America. "Paradoxically, the future of work/jobs might actually be positive for the entertainment/leisure industry which has been particularly badly hit by COVID. In a world of less work and more leisure, we expect people will want to dine out at restaurants, fly abroad on holiday and go to concerts again," the firm wrote in a "Future of Work" thematic investing note in May 2021. That belief is in line with Cohen's golf investment; he believes more free time will translate into more demand for golf. Amplify ETFs CEO Christian Magoon also thinks a four-day workweek will benefit leisure and entertainment stocks but in a different way than Cohen. Rather than golf, he believes video game stocks will be the winners of this trend. "We'll likely see more gaming, especially if you think of the demographics of a younger workforce. They definitely seem to be spending more of their free time playing video games than playing golf," Magoon said. "Golf is kind-of an old person sport; it really isn't blooming among the 20- and 30-somethings." Magoon highlighted his firm's video game tech ETF, which trades under the ticker GAMR . The fund's top holdings include Take-Two Interactive Software and online games platform Nexon. The fund has an expense ratio of 0.75%. Year to date, the fund is down more than 9%. Take-Two is up 18.5% over the last 12 months but has declined more than 9% in 2024. Similarly, U.S.-traded shares of Nexon have tumbled nearly 15% year to date. Magoon also highlighted several online stocks, including companies in cloud computing and cybersecurity, that may also see a boost from a shorter workweek. Amplify has the Global Cloud Technology ETF (IVES) , which has gained 5.8% in 2024 and 35.7% over the last 12 months. The ETF charges 0.68% in fees. German internet provider Ionos and Nice are among the largest holdings in the fund. The firm's cybersecurity ETF (HACK) is up just 1.6% for the year, underperforming the broader market. On a yearly basis, it is up 28.3%, outperforming the S & P 500 by around 6%. It trades at a 0.6% expense ratio and has 24 holdings, the largest of which are Broadcom , Cisco Systems and General Dynamics . "It's not really a directional play, like just owning an airlines ETF and oil," Magoon said. "Instead, this is really a technology play, looking at companies, for the most part, that are engaged with the consumer." Opposition to change Opponents of a shorter workweek, however, argue that such a change is both politically and economically unfeasible. David Bahnsen, chief investment officer and founder of The Bahnsen Group, believes a shorter workweek will have more of an impact on smaller companies. More importantly, said Bahnsen, a shorter workweek won't necessarily result in increased happiness or better lifestyles. "I think it would be really counterproductive. There are 'so many more' people that are voluntarily unemployed or working less — and yet it coincides with a huge increase in unhealthy behaviors and activities," per Bahnsen. Nonetheless, he remains unconcerned from an investing standpoint. "I'm not at all worried about it as an investor because I don't think it'll ever become law," said Bahnsen. Correction: This article has been updated to reflect that David Bahnsen is the chief investment officer and founder of The Bahnsen Group. An earlier version misstated his title.