Artificial intelligence (AI) is reshaping the technology sector, and its stocks have seen significant growth recently.
The 2026 AI Investor Outlook Report from The Motley Fool reveals that, despite ongoing concerns about potential market bubbles, 62% of Americans believe in AI’s long-term profitability. Given that the industry appears poised for expansion, investing now may yield considerable returns in the years to come.
However, navigating this volatile sector to select the right individual stocks can be a real challenge. For many investors, AI ETFs offer a simpler, less risky way to diversify portfolios and enter the market.
Here are three funds that emphasize AI to varying extents and could fit different investment strategies.
1. iShares Future AI Technology ETF
The iShares Future AI Technology ETF includes stocks involved in various aspects of AI, such as infrastructure, hardware, software, and services. With only 49 stocks, it’s a relatively focused fund.
This narrow scope can be risky, especially in an already volatile field. Such a concentrated ETF might not offer as much diversification as other options.
On the flip side, a targeted approach might lead to above-average returns since lower performance from one stock has less impact on overall returns. Last year, this fund delivered around 30% total returns, compared to approximately 18% for the broader index.
While many holdings are small-cap stocks that come with their own volatility, there’s also potential for substantial growth if the AI sector continues to thrive.
2. Invesco Semiconductors ETF
The Invesco Semiconductors ETF takes a different approach, emphasizing the key semiconductor technology that underpins AI advancements. As high-performance computing grows, the need for specialized hardware increases, making this sector essential.
This fund is comprised of just 30 stocks that focus on semiconductor production. Although semiconductors are used across various industries, this particular area has seen impressive growth lately.
Like the iShares fund, this one is less diversified, yet its narrow focus could lead to stronger returns. The Invesco Semiconductors ETF yielded around 38% last year and has an impressive total return of 1,660% since its inception in 2005.
3. Vanguard Information Technology ETF
For those interested in gaining exposure to the AI sector while minimizing volatility, the Vanguard Information Technology ETF might be a solid choice.
Instead of focusing solely on AI stocks, this ETF encompasses the entire technology industry, with 322 stocks that provide considerable diversification. It does hold major players in AI, like Nvidia and Micron Technology, but it balances those with many other stocks.
While this ETF offers decent returns—just under 22% last year—it’s somewhat lower than the other AI-centric funds mentioned. Still, its broader focus could be appealing to investors seeking a more balanced approach.
Investing in AI could be a worthwhile venture in the future, and AI ETFs serve as a practical means to engage with this sector without having to dig deep into individual stock analysis. Evaluating your individual investment goals and risk tolerance will guide you in choosing the right AI ETF for your portfolio.
