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It's no secret that artificial intelligence, or AI, is the key trend driving the stock market right now, especially when it comes to some of the largest and most popular companies to invest in. But choosing individual AI stocks can be challenging.
If you're looking to get AI exposure in your portfolio but aren't sure what stocks are the best opportunities, you might want to consider using exchange-traded funds, or ETFs, to invest instead. Here are five top AI ETFs that could be worth a closer look right now.
|
Fund Name (Symbol) |
Total Assets |
Expense Ratio |
|---|---|---|
|
Invesco QQQ ETF (QQQ +0.01%) |
$326.6 billion |
0.20% |
|
iShares Future AI & Tech ETF (ARTY +0.02%) |
$756 million |
0.47% |
|
Invesco AI and Next Gen Software ETF (IGPT +0.01%) |
$428 million |
0.58% |
|
GlobalX Artificial Intelligence & Technology ETF (AIQ +0.01%) |
$2.71 billion |
0.68% |
|
ARK Autonomous Technology & Robotics ETF (ARKQ +0.01%) |
$947.7 million |
0.75% |
Data source: Fund websites. Data accessed on Jan. 7, 2025.
The Invesco QQQ isn't technically an AI ETF, but it's a fund that tracks the Nasdaq-100 index and offers a lot of exposure to the top AI companies at a lower investment cost, or expense ratio, than the other funds discussed here. The fund's top 10 holdings make up 53% of the total assets, and nine of them are clearly AI plays. Top holdings include Apple (AAPL +0.01%), Nvidia (NVDA 0.01%), and Microsoft (MSFT +0.01%), but there are also plenty of smaller, high-potential AI stocks, such as Palantir (PLTR +0.01%) and CrowdStrike (CRWD +0.05%), just to name a couple.
The iShares Future AI & Tech ETF isn't the best-known fund in the space, but it offers an AI-focused approach for a lower expense ratio that most other specialized AI ETFs. There are a total of 50 stocks in the index the fund tracks, with top holdings including Broadcom (AVGO +0.03%), Arista Networks (ANET +0.02%), and Nvidia.
The Invesco AI and Next Gen Software ETF is one of the oldest AI ETFs, with an inception date nearly 20 years ago. Since that time, the fund has produced annualized total returns of 12.7% for investors, handily outpacing the S&P 500. The fund's top three holdings include Nvidia, Alphabet (GOOGL +0.02%)(GOOG +0.02%), and Meta Platforms (META +0.00%).
The GlobalX Artificial Intelligence & Technology ETF is one of the largest AI-specific ETFs by market cap and owns 84 different stocks. This index fund is unique because the most common AI stocks aren't the largest holdings. Nvidia barely cracks the top 10, for example. The top three stocks are Tesla (TSLA 0.01%), Broadcom, and ServiceNow (NOW +0.05%), and this is not a top-heavy ETF. All of the top 10 stocks make up between 3.2% and 4.5% of the fund's assets.
The ARK Autonomous Technology & Robotics ETF is the only actively managed ETF on this list. Instead of tracking an index of AI stocks and attempting to match its performance, this ETF aims to outperform its benchmark by having its managers construct a portfolio. It is a rather concentrated ETF, typically holding 30 to 50 stocks, and aside from Tesla, its top holding, most of the largest stocks are companies you might not be too familiar with. Teradyne (TER +0.01%) and Kratos Defense & Security (KTOS +0.01%) are the Nos. 2 and 3 holdings, respectively.
This is a list of five solid AI-focused ETFs, and if you're looking for more exposure to artificial intelligence stocks in your portfolio, I don't think you'll go wrong with any of them (or a combination of a few of them). The best fit for you depends on a few factors, such as how much volatility you're comfortable with, whether your priority is beating the market or simply benefiting from the AI wave, and other factors.