Artificial intelligence stocks drove market performance in 2025, with large technology companies and the so-called 'Magnificent Seven' leading the advance. Companies are increasing their AI development budgets, spending billions to establish leadership positions. Funds concentrating on this sector remain exchange-traded funds to consider for 2026.
Many investors have focused heavily on companies such as Nvidia and Microsoft during the current rally. Market gains are already showing signs of broadening in early 2026. This suggests the next group of potential winners, many held within these ETFs, could soon gain attention.
The AI market is projected to reach $2.4 trillion by 2032. Three ETFs are positioned for potential growth from current levels.
The Global X Artificial Intelligence & Technology ETF, trading under NASDAQ: AIQ, follows the Indxx Artificial Intelligence & Big Data Index. This index includes companies engaged in AI for big data analysis or hardware production.
This fund avoids pure market capitalization weighting, which would overweight mega-cap stocks. It first categorizes companies by their AI exposure, then weights them within those categories. Greater focus on the theme results in higher portfolio weight.
Only three 'Magnificent Seven' names—Alphabet, Tesla, and Apple—are among its top ten holdings. They represent approximately 11% of the total weighting. The portfolio has a large-cap orientation, but its methodology helps avoid the concentration issues affecting many AI and technology ETFs. This structure could support performance during market rotations.
A limitation is its passive management tied to an index rebalanced twice yearly. Rapid industry changes might mean slower adaptation. Still, it offers a way to invest in AI without relying solely on major technology names already widely held.
The iShares A.I. Innovation and Tech Active ETF, with ticker NYSEMKT: BAI, employs an active management approach considered suitable for this sector. It invests in companies worldwide, of various sizes, that meet minimum revenue and earnings thresholds and are positioned as AI leaders.
This fund has a more pronounced concentration in 'Magnificent Seven' stocks. Its top five holdings are Nvidia, Broadcom, Alphabet, Microsoft, and Taiwan Semiconductor Manufacturing. These account for about 28% of the portfolio.
With over $8 billion in assets under management, the iShares ETF is among the largest and most liquid in this category. It is supported by BlackRock's research department and offers active management at a lower expense ratio than the Global X ETF. This could be advantageous in a fast-evolving industry.
The Defiance Quantum ETF, listed as NASDAQ: QTUM, is linked to the BlueStar Machine Learning and Quantum Computing Index. It targets companies involved in advanced quantum computing, superconducting materials, quantum algorithms, specialized manufacturing equipment, and advanced computing hardware.
If generative AI represents technology's near-term future, quantum computing may be viewed as a longer-term transformation. When fully realized, this technology could deliver computing power exceeding traditional computers. This would enable rapid progress in technology, healthcare, communications, robotics, and other economic sectors.
This technology remains in early development, far from widespread adoption. Its investment potential is considered significant. Part of its appeal stems from uncertainty about how large quantum computing might become. Many investors may seek exposure to capture potential returns.
Before purchasing shares in the Global X Artificial Intelligence & Technology ETF, note that The Motley Fool Stock Advisor analyst team recently identified ten stocks they recommend for investors now. The Global X ETF was not among them. The ten selected stocks are seen as having potential for substantial returns in coming years.
The team highlighted that Netflix was included on their list on December 17, 2004. A $1,000 investment at that recommendation would now be worth $487,089. Nvidia was listed on April 15, 2005. A $1,000 investment then would now be worth $1,139,053.
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