Nvidia (NVDA -0.20%) was worth $360 billion at the start of 2023, and less than three years later, it's now the world's largest company with a market capitalization of $4.6 trillion. Its data center chips are responsible for almost all of that value creation, because they are the most powerful in the world for developing artificial intelligence (AI), and demand continues to outstrip supply.
Nvidia is the largest holding in the Roundhill Generative AI and Technology ETF (CHAT 1.71%), which is an exchange-traded fund (ETF) that invests exclusively in companies at the forefront of the AI revolution. It has soared by a whopping 52% so far this year, obliterating the 11% gain in the S&P 500 (^GSPC 0.30%) index.
The AI boom could drive the ETF to market-beating returns yet again in 2026, and since a single share in the fund can be purchased for under $65, it's suitable for portfolios of all sizes. Read on.
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A concentrated portfolio of AI stocks
The Roundhill Generative AI and Technology ETF invests in companies developing the platforms, infrastructure, and software driving the AI revolution forward. The ETF holds just 43 stocks, which emphasizes its extremely narrow focus, and it's quite top-heavy because its five largest positions account for 25.1% of the total value of its portfolio.
However, those five stocks are some of the AI industry's heavyweights.
|
Stock |
Roundhill ETF Portfolio Weighting |
|---|---|
|
1. Nvidia |
7.90% |
|
2. Alphabet |
5.40% |
|
3. Oracle |
4.32% |
|
4. Microsoft |
3.80% |
|
5. Meta Platforms |
3.72% |
Data source: Roundhill Investments. Portfolio weightings are accurate as of Oct. 12, 2025, and are subject to change.
Nvidia's graphics processing units (GPUs) are the benchmark for AI development. The latest Blackwell Ultra chips deliver up to 50 times more performance than the older H100 chips that launched just three years ago, so the company's technology is improving at a rapid pace. The Blackwell Ultra GPU architecture is designed for the latest AI reasoning models, which leading startups like OpenAI and Anthropic continue to develop.
Alphabet, Oracle, Microsoft, and Meta Platforms are four of Nvidia's biggest customers. They use the chip giant's GPUs to develop their own AI models and software applications, but Alphabet, Oracle, and Microsoft also operate cloud computing divisions that rent data center capacity to other businesses for profit.
The Roundhill ETF also holds several other top AI stocks outside its top five positions:
- Broadcom, which supplies customizable AI data center chips, in addition to industry-leading networking equipment that accelerates processing speeds.
- Advanced Micro Devices, which directly competes with Nvidia in the market for AI data center GPUs.
- Amazon, which has deployed over 1,000 AI applications across its entire organization to create new opportunities in its e-commerce, cloud computing, streaming, and digital advertising businesses.
- Palantir Technologies, which offers an expanding portfolio of software products to help organizations extract maximum value from their internal data.
- Micron Technology, which supplies the high-bandwidth memory solutions integrated in the latest AI data center GPUs from Nvidia and AMD.
The Roundhill ETF can help investors beat the market
The Roundhill ETF isn't designed to be a complete stock portfolio on its own, because it's solely geared toward the success of AI. Instead, it could be the perfect addition to a diversified portfolio of other funds and individual stocks that have little or no exposure to the AI industry already.
Plus, the ETF was established in May 2023, so it doesn't have a very long track record for investors to analyze. However, it has returned a whopping 141% since then, comfortably beating the S&P 500, which is up by just 56% over the same period.
The ETF is actively managed, meaning Roundhill's team of experts will regularly buy and sell stocks based on what they believe will deliver the best returns, which is a key reason for its outperformance. But that comes with additional costs; the ETF has an expense ratio of 0.75%, so an investment of $100,000 will incur an annual fee of $750.
It's far more costly to own than a passive index fund like the Vanguard S&P 500 ETF, for instance, which has an expense ratio of just 0.03%.
That isn't an issue right now because the Roundhill ETF's incredible performance is more than covering the associated costs, but it's something to keep in mind because a high expense ratio can eat away at investors' returns over the long term. Nevertheless, it could be a great ETF for investors who want to own a slice of the world's best AI stocks during 2026.
