From Nasdaq: 2025-01-18 07:00:00

AI is a booming market, set to triple by 2030 to over $243 billion. Big tech and startups are vying for dominance, but some are just trying to cash in without contributing. Investors must identify promising AI stocks amid fears of a bubble reminiscent of the dot-com era.

AI-focused ETFs like Global X Robotics & Artificial Intelligence ETF (BOTZ) offer diversification. BOTZ, with $2.6 billion in assets, has a focused portfolio with high trading volume. Investors seeking AI and robotics exposure may find this appealing, despite the higher expense ratio of 0.68%.

iShares Expanded Tech Sector ETF (IGM) boasts a broad tech portfolio with many AI-related companies. Its $5.7 billion asset base and competitive 0.41% fee have led to strong performance, outperforming the market by 36.8%. However, it includes major tech players like Apple and Microsoft, potentially skewing investor portfolios.

Direxion Daily Semiconductor Bull 3x Shares ETF (SOXL) is not AI-specific but has ties to the industry through semiconductor stocks. Leveraging 3x long exposure, it offers amplified returns when the semiconductor sector performs well. This fund is best suited for risk-tolerant active traders due to its use of leverage.

Investors should beware of AI-themed ETFs that may not offer true AI exposure. Comparing holdings with traditional tech funds like Technology Select Sector SPDR Fund (XLK) can reveal overlap, suggesting similar AI exposure with lower expense ratios. Be cautious of ETFs capitalizing on AI trends without delivering genuine industry benefits.



Read more at Nasdaq: Capitalize on the AI Revolution With These 3 ETFs