2 Artificial Intelligence (AI) ETFs to Confidently Buy Heading Into 2025

Rate this post


Artificial intelligence (AI) was the dominant theme in the stock market in 2024. There were standout performances from select AI chips, AI software and even energy stocks as power-hungry data centers boosted demand for electricity.

By: Morgan Stanleyonly the world’s four largest technology companies could spend a combined $300 billion develop AI next year. As a result, it is likely to remain the top story in the stock market throughout 2025.

But picking individual winners and losers won’t be easy. Advanced Micro Devices The stock is up 50% in the first few months of 2024, but it’s on track to end the year down by 10%. This sequence of events would have been impossible to predict 12 months ago, especially since AMD is now the leading supplier of AI chips.

As a result, most investors would be better off buying AI-based exchange-traded funds (ETFs) instead, which can offer diversified exposure to this technological revolution.

Two investors looking at a set of computer screens with price charts on them.
Image source: Getty Images.

It’s common ETF:it should hold hundreds or even thousands of individual stocks, but since the AI ​​industry is still in its early stages, most ETFs in this space only have a few dozen names as part of a balanced portfolio of other funds and individual stocks.

In doing so, investors should look for AI ETFs that have diversified industry exposure.In other words, a good ETF will hold shares in AI hardware companies such as Nvidia:AI software companies love Microsoftand even companies deploying AI in their legacy businesses, for example Meta platforms or ServiceNow:.

While AI is likely to create significant value, past technology booms (like the Internet) have taught us that volatility is part of the journey; some companies will hit their home runs, while others will fail completely.By owning a piece of each AI segment, investors can maximize their chances of generating positive returns on a consistent basis.

Here’s why Roundhill Generative AI and Technology ETF (NYSEMKT: CHAT) and: iShares Future AI and Technology ETF (NYSEMKT: ARTY) may be the two best AI ETFs investors can embrace in the new year.

This is a major AI fund because its sole purpose is to invest in companies that develop the infrastructure, platforms and software that drive the AI ​​revolution.

The ETF holds just 50 stocks, and it’s relatively high, as its five largest holdings alone account for 26.6% of its total portfolio value;

 
Report

Similar Posts

Leave a Reply

Your email address will not be published. Required fields are marked *