ETFs: A Smart Way to Invest in AI

Exchange-Traded Funds (ETFs) provide an effective way to invest in significant trends like artificial intelligence (AI) without having to pick individual stocks that might have received accolades in this sphere.

The ongoing AI boom is promising impressive long-term returns for investors. According to IDC, AI could generate an additional $20 trillion by 2030.

Here are two ETFs that could help you capitalize on this wave of investment potential.

1. Dan Ives Wedbush AI Revolution ETF

Dan Ives is a well-known tech analyst on Wall Street. Currently, he serves as a managing director and senior equity research analyst at Wedbush Securities. The Dan Ives Wedbush AI Revolution ETF tracks 30 selected companies from Ives’ coverage, each uniquely positioned to thrive in the global AI transformation.

As of June 10, 2025, the top holding was Microsoft at 5.65%, followed closely by Nvidia (5.34%), Broadcom (4.82%), and Taiwan Semiconductor Manufacturing (4.77%). Smaller stakes include MongoDB (1.52%) and Soundhound AI (0.95%).

This ETF blends established giants like Microsoft and Nvidia with the growth potential of emerging companies like Soundhound AI, a frontrunner in speech recognition technology. The fund is diversified across sectors like cloud computing, cybersecurity, robotics, electric vehicles, software, and semiconductors. The weightings are based on the market capitalization of each company—larger firms comprise a bigger portion of the fund, while smaller companies are less weighted, which helps in managing risk.

Since this is a new fund that began trading in June, it might be wise to approach it cautiously, perhaps starting with a small investment allocation. While Wedbush is a reputable firm and this ETF has a strong lineup, it may be prudent for investors to observe how the fund performs over time.

Keep in mind that the fund has an expense ratio of 0.75%, which translates to about $7.50 annually for every $1,000 invested. It’s not excessive, especially considering the exposure to high-growth companies.

2. Roundhill Magnificence Seven ETF

The Roundhill Magnificent Seven ETF tracks a select group of high-tech stocks known as the “Magnificent Seven.” This ETF includes all the companies found in the Dan Ives ETF, so opting for either could be beneficial, or you might consider holding both.

The Magnificent Seven includes some of the largest market-cap companies, such as:

• Apple
• Alphabet (Google)
• Amazon
• Meta Platforms (Facebook)
• Tesla
• Microsoft
• Nvidia

This fund rebalances quarterly to maintain equal weight across its holdings. Analysts expect annual revenue growth for these companies to range from 10% for Apple to 29% for Nvidia.

If investors adopt a dollar-cost averaging strategy, they could anticipate returns that align with the projected revenue growth of this group, which historically aligns with the S&P 500’s average return of about 10% over the past decades.

One aspect to consider regarding the Roundhill ETF is the potential upside and downside of quarterly rebalancing. While this ensures consistent exposure, it might lead to missed opportunities if one stock outperforms over an extended period.

Nonetheless, this ETF is a solid choice for those wanting an investment in major tech firms without the hassle of managing individual stocks. It also features a low expense ratio of 0.29%, representing just $2.90 per $1,000 invested.

The Magnificent Seven collectively boasts a market capitalization of $17 trillion, generating about $2 trillion in revenue each year and possessing free cash flow of $395 billion. Viewing this group as a single entity indeed simplifies long-term investing.