Investing in emerging industries like artificial intelligence (AI) can be risky. Past technology booms have taught investors that not every company survives, and picking the winners and losers isn’t easy. For instance, Amazon emerged from the dot-com internet bubble to become one of the largest companies in the world, but other popular names like Pets.com failed spectacularly.
When we look back on this moment in a couple of decades, we might find that several AI companies also failed the test of time. Thankfully, there are several exchange-traded funds (ETFs) which can take the guesswork out of investing in the AI race, and one of them is the iShares Future AI and Tech ETF(NYSEMKT: ARTY).
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This fund holds 50 different AI stocks, providing exposure to a diverse cross section of this emerging industry. Investors can buy a single share in the ETF for just $30, and here’s why it might be a great idea in 2025.
Image source: Getty Images.
The iShares Future AI and Tech ETF invests in companies developing the infrastructure, software, and services powering the AI revolution. That includes suppliers of data center chips and components like Nvidia, software providers like Palantir Technologies, and cloud services giants like Microsoft.
The list of top 10 holdings in the ETF features some of the biggest names in the AI space, and they represent 39.4% of the total value of its portfolio:
Stock
iShares ETF Portfolio Weighting
1. Nvidia
4.56%
2. Broadcom
4.54%
3. Arista Networks
4.52%
4. Advanced Micro Devices
4.42%
5. Vertiv Holdings
4.24%
6. Super Micro Computer
3.79%
7. Palantir Technologies
3.65%
8. Autodesk
3.40%
9. Microsoft
3.20%
10. Snowflake
3.15%
Data source: iShares. Portfolio weightings are accurate as of April 16, 2025 and are subject to change.
Nvidia, Broadcom, and AMD are three of the world’s top suppliers of data center chips for AI development. Nvidia’s Blackwell and Blackwell Ultra graphics processing units (GPUs) lead the industry, but AMD looks set to catch up (in terms of performance) when it launches its MI350 series GPUs in the next few months. Broadcom’s AI accelerators, on the other hand, are a different type of data center chip which can be customized to suit the needs of its hyperscale customers (like Alphabet‘s Google Cloud).
Palantir Technologies developed a unique portfolio of software products which help businesses and governments extract more value from their data using AI. Its stock soared by 340% last year on the back of red-hot demand for its software, but it has pulled back in 2025 due to the sell-off in the broader market.
Microsoft is one of Nvidia’s biggest customers. The data centers operated by its Azure cloud platform are filled with AI GPUs, which businesses can rent to help develop their own AI software. Azure also offers access to the latest ready-made large language models (LLMs) from third parties like OpenAI, which businesses can use to accelerate their progress.
Snowflake is another provider of cloud services where businesses can access a suite of AI tools to turn their internal data into useful AI applications. The iShares ETF also holds positions in other cloud giants like Amazon and Alphabet.
Meta Platforms, C3.ai, and Oracle are just a few of the other popular AI stocks investors will find in this ETF.
There are a few caveats investors should consider before rushing to buy the iShares ETF. Since it exclusively holds AI stocks, it can experience extreme volatility during times of uncertainty. In fact, it’s currently down 20% in 2025 so far, which is double the 10% loss in the S&P 500(SNPINDEX: ^GSPC). That’s why investors should only buy it as part of a diversified portfolio.
Second, The iShares ETF doesn’t have much of a track record in its current form. Although it was established in 2018, it was fully reconstructed and given a new name in August last year to reflect a greater focus on AI stocks. It might be difficult to predict how its strategy will perform going forward as a result.
Finally, tariffs and global trade tensions are casting some uncertainty over how much money companies will spend to fuel their AI ambitions this year, which might be a temporary headwind for hardware suppliers like Nvidia, Broadcom, and AMD. But Nvidia CEO Jensen Huang predicts data center infrastructure spending will top $1 trillion per year by 2028, and consulting firm PwC thinks AI on the whole could add $15.7 trillion to the global economy by 2030, so the long-term picture still looks promising.
Therefore, even though the iShares ETF doesn’t have much performance history, it holds all of the stocks you would expect to do well if the above forecasts come to fruition. That means the year-to-date decline of 20% might be a great entry point for investors who are willing to hold it for the next five years (or longer).
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Arista Networks, Autodesk, Meta Platforms, Microsoft, Nvidia, Oracle, Palantir Technologies, and Snowflake. The Motley Fool recommends Broadcom and C3.ai and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
1 No-Brainer Artificial Intelligence (AI) ETF to Confidently Buy With $30 in 2025 was originally published by The Motley Fool
