Key Takeaways
- Artificial intelligence (AI) stocks are expected to continue growing, with the market projected to reach $2.4 trillion by 2032.
- Investing in AI-focused ETFs can provide a way to tap into the growth potential of the sector without trying to identify individual winners.
- The Global X Artificial Intelligence & Technology ETF, iShares A.I. Innovation and Tech Active ETF, and Defiance Quantum ETF are three options to consider.
- These ETFs offer different approaches to investing in AI, including passive and active management, and varying levels of exposure to megacap tech stocks.
Introduction to AI Investing
Artificial intelligence (AI) stocks have been a driving force in the market, with the "Magnificent Seven" names, including Nvidia and Microsoft, leading the charge. However, as the AI market continues to grow, with expectations of reaching $2.4 trillion by 2032, there are still opportunities for investors to get in on the ground floor. As one expert notes, "we’re still in the early innings" of the AI boom, and "the next generation of potential winners" may soon have their moment. This means that investing in AI-focused ETFs can provide a way to tap into the growth potential of the sector without trying to identify individual winners.
Global X Artificial Intelligence & Technology ETF
The Global X Artificial Intelligence & Technology ETF (AIQ) is one option for investors looking to tap into the AI growth story. This ETF tracks the Indxx Artificial Intelligence & Big Data Index, which targets companies involved in AI to analyze big data for either themselves or other companies or through the production of hardware. As the fund’s methodology states, it categorizes companies by their AI exposure first, and then weights within those categories, giving greater focus on and exposure to the theme. This approach means that only three of the "Magnificent Seven" names – Alphabet, Tesla, and Apple – are among its top 10 holdings, accounting for a total weighting of about 11%. As the article notes, "the fund’s methodology helps it stay away from the concentration issues that plague many AI and tech ETFs."
iShares A.I. Innovation and Tech Active ETF
The iShares A.I. Innovation and Tech Active ETF (BAI) takes a different approach, using active management to invest in companies of all sizes from around the world that meet minimum revenue and earnings requirements and are positioned to be leaders in the AI race. This fund has a more significant concentration of megacap tech stocks, with its top five holdings – Nvidia, Broadcom, Alphabet, Microsoft, and Taiwan Semiconductor Manufacturing – accounting for approximately 28% of the portfolio. However, with over $8 billion in assets under management, the iShares ETF is one of the largest and most liquid in the space, backed by a deep research department at BlackRock.
Defiance Quantum ETF
The Defiance Quantum ETF (QTUM) is linked to the BlueStar Machine Learning and Quantum Computing Index, targeting companies that are actively engaged in advanced quantum computing, the development of superconducting materials, algorithms built for quantum computers, equipment and materials used specifically in the manufacturing of quantum computers, and advanced computing hardware. As the article notes, "quantum computing could be considered the longer-term revolution" in technology, with the potential to generate computing power far beyond that of traditional computers. While this technology is still in its early stages, the Defiance Quantum ETF offers investors a way to tap into the potential of quantum computing, with the potential for significant returns.
Conclusion
In conclusion, investing in AI-focused ETFs can provide a way to tap into the growth potential of the sector without trying to identify individual winners. The Global X Artificial Intelligence & Technology ETF, iShares A.I. Innovation and Tech Active ETF, and Defiance Quantum ETF offer different approaches to investing in AI, including passive and active management, and varying levels of exposure to megacap tech stocks. As the AI market continues to grow, these ETFs may be worth considering for investors looking to get in on the ground floor of the next big thing in technology. As one expert notes, "the boom is still in its early innings," and "the next generation of potential winners" may soon have their moment.
https://www.fool.com/investing/2026/01/14/3-ai-etfs-poised-for-100-surge-as-tech-revolution/