9 Best AI ETFs to Profit From in 2025

Wondering which AI ETFs to invest in for 2025? Look no further.

I’ve identified the best AI ETFs that can help you capitalize on the booming AI sector. This article covers top ETFs, their strengths, and how they can fit into different investment strategies.

Top AI ETFs to Consider

If you have your favorite AI stock, great, but if you’re not sure how to value them or you are looking for exposure without the underlying single equity risk, then these AI ETFs can still offer investors a chance to capitalize on the rapid advancements in artificial intelligence.

In line with themed investing, these ETFs give access to a diverse range of leading AI companies, balancing high potential with managed risk.

From the most liquid options to those focusing on niche sectors like semiconductors and robotics, each ETF offers unique benefits catering to various investment strategies.

Here are the top nine AI ETFs to consider for your portfolio.

1. Invesco QQQ Trust ETF (QQQ)

The Invesco QQQ Trust ETF (QQQ) stands out as one of the most liquid AI ETFs available.

Buy why is it an AI ETF?

Simple…a third of this ETF provides exposure to top AI players such as Tesla, Microsoft, Alphabet, and Nvidia, making it a strong candidate for any investor’s portfolio.

The ETF’s diverse holdings reduce the risk associated with individual stocks, and its liquidity offers ample opportunities for options strategies to further minimize risk.

Investing in QQQ provides exposure to a broad spectrum of AI companies without the hassle of picking individual stocks.

MY NUMBER 1 reason why this is #1, it’s liquidity. Having the ability to work your way in and out of this ETF with different strategies to increase your chances of making a nice return is really appealing.

2. Van Eck Semiconductor ETF (SMH)

The Van Eck Semiconductor ETF (SMH) is ideal for investors seeking direct exposure to the semiconductor industry, crucial for AI advancements. This ETF allows investors to benefit from the growth in semiconductors without the risk of individual stock volatility.

Nvidia (NVDA) has made the most contribution to the growth of this ETF in the last 5 years.

Focusing on companies like Taiwan Semiconductor and Intel, SMH offers a targeted yet diversified approach to investing in the backbone of AI technology.

3. Global X Robotics & Artificial Intelligence ETF (BOTZ)

The Global X Robotics & Artificial Intelligence ETF (BOTZ) focuses on approximately 40 firms at the forefront of robotics and AI technology. This ETF aims to capitalize on the rapid advancements in automation and intelligent systems, making it a compelling choice for investors looking to gain exposure to the leaders in AI and robotics innovation.

4. Global X Artificial Intelligence & Technology ETF (AIQ)

The Global X Artificial Intelligence & Technology ETF (AIQ) offers globally diversified exposure to leading AI companies and is known for its tax efficiency. This ETF is perfect for investors seeking a balanced, long-term investment in the AI sector, providing a mix of stability and growth potential.

5. WisdomTree Artificial Intelligence and Innovation ETF (WTAI)

The WisdomTree Artificial Intelligence and Innovation ETF (WTAI) aims to track the investment performance of an index focused on AI and innovation.

This ETF is designed for investors seeking exposure to companies at the cutting edge of AI technology and innovation, making it a promising addition to a forward-looking investment portfolio.

Note it has underperformed against the others in the last 5 years.

6. Invesco AI and Next Gen Software ETF (IGPT)

The Invesco AI and Next Gen Software ETF (IGPT) targets companies involved in the development of AI software, allocating about 61 percent of its assets to top holdings. This focus on next-generation software development positions IGPT as a strategic investment for those looking to benefit from advancements in AI-driven software solutions.

7. Roundhill Generative AI & Technology ETF (CHAT)

The Roundhill Generative AI & Technology ETF (CHAT) specializes in generative AI stocks, employing a proprietary scoring methodology to select its investments. With a current stock price of $38.81, CHAT offers a unique opportunity to invest in the evolving field of generative AI.

CHAT is ideal for those looking to capitalize on the latest trends in AI technology.

8. Amplify Ai Powered Equity ETF (AIEQ)

The Amplify Ai Powered Equity ETF (AIEQ) stands out for its data-driven investment process, utilizing AI to inform its trading strategies. Potential ai investors should note that recent performance results have been less than stellar in the ai market.

Despite this, AIEQ remains an interesting option for those looking to explore ai development investment methodologies.

9. iShares Future AI & Tech ETF (ARTY)

The iShares Robotics and Artificial Intelligence Multisector ETF (IRBO) was a BlackRock fund that offered investors exposure to over 100 companies benefiting from the growth in robotics and AI., well they decided to change the name and ticker symbol.

It is now, iShares Future AI & Tech EFT (ARTY), and it’s 49 holdings are designed to capture the broad potential of disruption with AI technologies across multiple sectors, making it a versatile addition to any portfolio.

Investing in ARTY allows tapping into industries ranging from industrial robotics to AI-driven healthcare solutions.

Understanding AI ETFs

AI ETFs are financial instruments that allow investors to participate in the artificial intelligence sector while diversifying their investments.

These artificial intelligence ETFs use unique methodologies to target companies leading AI advancements and can be categorized by their investment strategies, including technology-focused and thematic ETFs.

Investing in AI ETFs rather than individual stocks helps mitigate risks associated with market volatility, offering a balanced approach to tapping into the AI market’s growth potential.

To make informed decisions, investors should evaluate their financial situation and objectives and gain a comprehensive understanding of the AI ETF market.

Definition and Concept

AI ETFs are baskets of stocks that focus on companies involved in artificial intelligence.

These ETFs typically hold stocks of various companies engaged in AI software development or AI hardware production. For example, the Invesco AI and Next Gen Software ETF includes major companies like Meta and Nvidia among its prominent holdings.

Investing in AI ETFs allows investors to gain diversified exposure to the AI sector without picking individual stocks.

Benefits of Investing in AI ETFs

Investing in AI ETFs allows investors to tap into the rapid growth potential of the AI sector while minimizing risks associated with individual stocks.

These ETFs offer exposure to multiple companies, helping to mitigate specific stock risk and balance potential high returns with reduced volatility compared to individual stock investments. If you want to capitalize on this trend, consider how to buy ai etfs.

Including AI ETFs in portfolios allows investors to benefit from the sector’s emerging growth while enjoying diversified investment opportunities. Including S&P 500 ETFs can further enhance diversification when investing in AI ETFs.

Key Considerations

When investing in AI ETFs, consider your investment goals, overall strategy, and diversification.

The performance of AI ETFs is influenced by the overall market conditions and the specific stocks within the fund. Factors such as the underlying stocks and their allocation within the fund play a crucial role in determining the performance of an AI ETF.

Be aware of the expense ratio, such as the ROBO ETF’s 0.95%, which can affect net returns. Allocating only a portion of your investment capital to AI ETFs can help reduce exposure to volatility.

Performance Analysis of AI ETFs

The performance of AI ETFs has shown significant variation, with top strategies achieving impressive returns.

For example, the Roundhill Generative AI & Technology ETF (CHAT) reported a remarkable return of 46.4% in 2023, showcasing the potential for substantial gains in the AI sector.

Analyzing both short-term and long-term performance helps investors understand the investment potential and market positioning of various AI ETFs.

One-Year Performance

In the past year, several AI ETFs have delivered noteworthy returns.

• SMH outperformed with the help of NVIDIA having a banner year
• CHAT, IGPT, AIQ outperformed the QQQ’s, each having 40 + % growth years

On the other hand, the iShares Future AI & Tech ETF (ARTY) recorded a return of only 21%, indicating some variability among AI ETFs. These performance metrics highlight the diverse investment potential within the AI ETF landscape.

Long-Term Growth

Over the long term, AI ETFs have demonstrated impressive growth. The Nasdaq CTA Artificial Intelligence index, for instance, has delivered a remarkable return of 122.82% over five years.

This trend underscores the increased adoption of trust Nasdaq artificial intelligence technologies and the significant potential for long-term investment gains.

As AI continues to evolve and integrate into various industries, the long-term growth prospects for AI ETFs remain robust.

Types of AI ETFs

AI ETFs come in various forms, each offering unique investment opportunities and risk profiles. These include technology-focused AI ETFs, thematic AI ETFs, and AI-enhanced ETFs.

Understanding these differences can help investors choose the best fit for their portfolios and investment goals.

Technology-Focused AI ETFs

Technology-focused AI ETFs primarily invest in companies that are pivotal in advancing artificial intelligence technologies.

These ETFs include major corporations like Amazon and Tesla, which are heavily involved in AI research and development. Focusing on these innovative companies, technology-focused AI ETFs provide exposure to significant advancements in AI across various sectors, including healthcare and logistics.

Such ETFs provide a diversified approach to investing in the AI sector while benefiting from the technological innovations driving the industry forward.

Thematic AI ETFs

Thematic AI ETFs target specific sectors or trends related to artificial intelligence, such as robotics and automation.

The Global X Robotics & Artificial Intelligence ETF (BOTZ), for example, invests in companies benefiting from advancements in industrial robotics and automation. These ETFs often hold similar investments to general tech ETFs but focus more on sectors poised for AI-driven growth.

Investing in thematic AI ETFs allows investors to capitalize on specific trends within the AI industry, potentially yielding high returns as these sectors evolve.

AI-Enhanced ETFs

AI-enhanced ETFs use algorithms to inform trading strategies, aiming to optimize returns for investors.

An example of such an ETF is the QRAFT AI-Enhanced US Large Cap ETF (QRFT), which employs AI to enhance its investment decisions. Similarly, the Roundhill Generative AI & Technology ETF utilizes a specialized scoring system to select its investments.

These ETFs leverage AI technologies to improve investment outcomes, offering a cutting-edge approach to portfolio management, including the automation index etf.

How to Invest in AI ETFs

Investing in AI ETFs requires a strategic approach to maximize potential gains while managing risks. The process begins with setting clear investment goals, followed by employing diversification strategies to spread risk across various assets. Understanding market potential versus risks is crucial for making informed investment decisions.

Here is a step-by-step guide to help navigate the investment process.

1. Setting Investment Goals

Clear investment goals guide decisions on which AI ETFs to purchase. Identifying specific financial aspirations helps investors align their strategies with their overall objectives, ensuring that their portfolio reflects their risk tolerance and time horizon.

Evaluating the underlying assets of AI ETFs helps investors make informed choices that align with their investment goals and long-term strategies.

2. Diversification Strategies

Diversifying your investments across multiple AI ETFs can maximize portfolio exposure and spread risk. A well-diversified fund can mitigate risks linked to market fluctuations, providing a more stable investment. Including AI stocks and other assets in portfolios enhances diversification and potentially increases returns.

This approach helps balance the high growth potential of AI technology with the safety of a diversified investment strategy.

3. Market Potential vs Risks

Investing in AI ETFs carries both significant potential returns and inherent risks related to market fluctuations. It’s crucial to consider factors like expense ratios, which affect the overall cost and profitability of the investment.

Active trading of AI ETFs may benefit from news-related price changes, creating opportunities for strategic buying and selling. Balancing market potential with associated risks is key to successful investing in AI ETFs.

Bottom Line

Investing in AI ETFs offers a promising avenue for tapping into the rapid growth and innovation within the artificial intelligence sector.

By providing diversified exposure to leading AI companies, these ETFs mitigate the risks associated with individual stocks while offering substantial growth potential.

As we move into 2025, understanding the different types of AI ETFs, their performance, and how to strategically invest in them can help you make informed decisions and achieve your financial goals. Embrace the future of investing with AI ETFs and position yourself for long-term success.