this Nasdaq Composite Materials(NasdaqIndex: ^i tocie) Index is home to nearly all companies listed on the Nasdaq Stock Exchange, many of which operate in the technology sector. The most compelling businesses in the group are primarily leaders in artificial intelligence (AI), and their stocks have produced some of the best returns over the past few years.
The index recently entered the correction field after gaining strong growth of 28.6% last year, and now has a record high of 13.4%. For investors, market uneasiness may be a great opportunity to buy a basket of high-altitude tech innovators at a discount. However, instead of choosing a single name, it is a good idea to buy an exchange-traded fund (ETF) that focuses on AI.
this Ishares Future AI and Technology ETF(nysemkt:arty) The name was founded in 2018, but the name was rebuilt last August and invested only among companies at the forefront of AI, including companies that develop data solutions, software and infrastructure.
The ETF fell 20.6% from recent premium products just three weeks ago, and investors can buy a stake for less than $40.
Image source: Getty Images.
ETFs can hold hundreds or even thousands of individual stocks, but Ishares Future AI and Tech ETFs can hold only 50 stocks. It is highly focused on the AI ​​topic I mentioned earlier, so it can experience extreme volatility in times of uncertainty. As a result, it is important to buy as part of a diversified portfolio of other funds and individual stocks.
That being said, the top ten holdings in the Ishares ETF are one of some of the leaders in AI hardware and software:
in stock
ishares ETF portfolio weighting
1. Broadcom
5.00%
2. Super microcomputer
4.94%
3. Nvidia
4.05%
4. Arista Network
4.01%
5. Advanced micro-equipment
3.88%
6. Palantir Technology
3.66%
7. Dassault Systems
3.57%
8. International commercial machines
3.57%
9. Cognition
3.39%
10. Vertiv hold
3.33%
Data source: iShares. As of March 6, 2025, portfolio weights are accurate and are subject to change.
Broadcom is a multifaceted AI hardware company. On the one hand, it is custom AI accelerator (a data center chip) that includes three super-large customers letter. On the other hand, it manufactures some of the industry's best data center networking devices, such as its Tomahawk switch, which regulates the speed at which data travels from one point to another. Broadcom's AI revenue surged 77% to $4.1 billion in the latest quarter (as of February 2).
NVIDIA is the most popular data center chip for AI development, including its new Blackwell-based GB200 graphics processing unit (GPU). However, Broadcom's AI ACELERATOR can be customized to suit the needs of its oversized customers, allowing them to design chips for specific workloads. This flexibility could threaten the dominance of NVIDIA chips, especially since Broadcom expects a demand for huge clusters of 1 million accelerators by 2027.
That's why buying ETFs is so effective – investors don't have to worry about choosing winners and losers, because no matter which chip maker ranks the highest, the fund may do a good job.
Palantir Technologies are also worth mentioning. Its stock was one of the best performing stocks in the AI ​​space last year, up 340%, despite its record-high declines. The company's software products leverage AI to help companies and governments extract valuable insights from their data, and they experienced a surge in demand last year.
In addition to its top 10 holdings, Ishares ETF has several other AI leaders Amazon,,,,, Microsoft,letter, Meta Platform,,,,, C3.AI,,,,, Oracleand more.
The iShares ETF does not have a long record of analyzing investors, as it was rebuilt only last August 12. However, since then, it has a return of 6.1%, which is better than the 5.1% return S&P 500 During the same period.
The artificial intelligence industry is still in its early stages, the best is the best. NVIDIA CEO Jensen Huang said the next generation of AI inference models, which require more time to “think” to provide more accurate responses, will have 100 times more computing power than previous models.
As a result, the AI ​​semiconductor and infrastructure boom is likely to last for years – Metaplatforms, Letters, Microsoft and Amazon plan to spend more than $300 billion on hardware in 2025 alone (merger). The spending will go to several data center hardware companies in the Ishares ETF, including NVIDIA, BRODCOM and advanced micro-device.
In addition, these tech giants can only invest this money if they expect returns, so it can also be converted into a large amount of AI cloud and software revenue in the future.
Therefore, the Ishares ETF may be the ideal way to buy a basket of high-quality AI stocks that are currently unpopular with this potentially revolutionary industry. By adding it to a diversified portfolio, investors can earn from boosting long-term gains, while protecting themselves from significant downside risks if AI fails to meet expectations.
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John Mackey, former CEO of Amazon's subsidiary Whole Foods Market, is a member of the board of directors of Motley Fool. Randi Zuckerberg is a sister of former marketing development director, Facebook spokesperson, and Meta Platform CEO Mark Zuckerberg, and a member of the Motley Fools’ board of directors. Alphabet executive Suzanne Frey is a member of the board of directors of Motley Fool. Anthony Di Pizio has no position in any of the stocks mentioned. Motley Fool owns and recommends advanced micro devices, Amphabet, Amazon, Arista Networks, International Business Machines, Meta Platforms, Microsoft, Nvidia, Oracle, Oracle and Palantir Technologies. Motley Fool recommends Broadcom, C3.AI, Cognizant Technology Solutions, and Nasdaq and suggests the following options: Long 2026 $395 Microsoft Phone and Short January 1, 2026 $405 on Microsoft. Motley Fool has a disclosure policy.
1 $1 Unwise Artificial Intelligence (AI) ETF purchased for $40 during the Nasdaq sold out
