3 AI-Powered ETF Choices for the Future of Tech Investing

As AI-driven technological advancements reshape the world, ETFs focused on companies engaged in AI are gaining traction. With AI revolutionizing sectors from healthcare to logistics, ETFs such as Robo Global Artificial Intelligence ETF (THNQ), First Trust Nasdaq Artificial Intelligence and Robotics ETF (ROBT), and Global X Robotics & Artificial Intelligence ETF (BOTZ) are positioned to harness significant growth opportunities.

With Trump's return to the White House, analysts expect a significant boost in AI initiatives within the government and military. However, the Trump administration is leaning toward cutting red tape and pushing deregulation, which could ease compliance-related issues and speed up innovation for technology companies. Trump also vowed to repeal Biden’s executive order on AI security and safety.

According to Statista, the global AI market is anticipated to reach $826.7 billion by 2030, exhibiting a CAGR of 28.5%. The United States is projected to have the largest market in AI at $50.16 billion in 2024.

It is commonly believed that AI is here to replace jobs, as it can assist in problem-solving, complex strategy development, and critical thinking. Despite this belief, studies show that AI will create 97 million new jobs by 2025. This makes the AI space a compelling choice for long-term investors.

Given these encouraging trends, let’s look at the fundamentals of the three promising Technology Equities ETFs, beginning with the third choice.

ETF #3: Robo Global Artificial Intelligence ETF (THNQ)

THNQ seeks to invest in companies’ stock operating across information technology, software and services, software, systems software, software research, and artificial intelligence software sectors. The fund tracks the performance of the ROBO Global Artificial Intelligence Index.

As of November 13, 2024, the fund had assets under management (AUM) of $146.53 million and a NAV of $49.26. THNQ has an expense ratio of 0.68%, compared to the category average of 0.58%.

The fund’s top holdings include NVIDIA Corporation (NVDA) with a 2.9% weighting, Shopify Inc. (SHOP) at 2.73%, CrowdStrike Holdings, Inc. (CRWD), and Palo Alto Networks, Inc. (PANW) at 2.47% and 2.39%, respectively. It currently has a total of 55 holdings.

Over the past year, the fund’s net inflow came in at $26.13 million. It has gained 31.6% over the past year and 13% over the past three months to close its last trading session at $48.50.

THNQ’s POWR Ratings reflect its promising prospects. The ETF has an overall rating of A, which translates to a Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.

It also has an A grade for Trade and Buy & Hold and a B for Peer. Of the 119 ETFs in the A-rated Technology Equities ETFs group, THNQ is ranked #46. To access all of THNQ’s POWR Ratings, click here.

ETF #2: First Trust Nasdaq Artificial Intelligence and Robotics ETF (ROBT)

ROBT invests in stocks of companies operating across information technology, software and services, software, systems software, automation products and services, software research, and artificial intelligence software sectors and tracks the Nasdaq CTA Artificial Intelligence and Robotics Index. First Trust Advisors L.P. manages this fund.

With $453.27 million in AUM, its top holdings are Palantir Technologies Inc. Class A (PLTR) with a 3.12% weighting in the fund, Symbotic, Inc. Class A (SYM) at 2.63% weight, followed by Upstart Holdings, Inc. (UPST), and Pegasystems Inc. (PEGA) with 2.58% and 2.07% weightings, respectively. The ETF has a total of 107 holdings.

The ETF's expense ratio is 0.65%, compared to the category average of 0.58%. ROBT fund outflow is $8.77 million over the past month.

Over the past three months, ROBT has gained 12% to close the last trading session at $45.50. The fund’s NAV was $45.55 as of November 14, 2024.

ROBT’s solid fundamentals are reflected in its POWR Ratings. The fund has an overall rating of A, which translates to a Strong Buy in our proprietary rating system.

The fund has an A grade for Trade and Buy & Hold. ROBT is ranked #33 in the same A-rated group. Click here to access all the ROBT ratings.

ETF #1: Global X Robotics & Artificial Intelligence ETF (BOTZ)

Global X Management Company LLC manages BOTZ. The fund invests in growth and value stocks of companies that are operating across the development of robotics and/or artificial intelligence. It seeks to track the performance of the Indxx Global Robotics & Artificial Intelligence Thematic Index.

As of November 14, BOTZ had $2.60 billion in assets under management and an NAV of $32.60. Its expense ratio of 0.68% compares to the category average of 0.58%.

The fund’s top holdings include NVDA with a 14.07% weight, Intuitive Surgical, Inc. (ISRG) with a 10.58% weight, ABB Ltd. (ABBN) with a 9.28% weight and Keyence Corporation (6861) with a 6.71% weight. It has a total of 46 holdings.

BOTZ’s trailing-12-month dividend of $0.05 yields 0.14% on the current price level, while its four-year average dividend yield is 0.20%.

BOTZ has gained 27.7% over the past year and 9% over the past nine months to close the last trading session at $32.59. Its fund inflow came in at $82.57 thousand over the past five days.

BOTZ’s promising outlook is reflected in its POWR Ratings. The ETF has an overall A rating, equating to a Strong Buy in our proprietary rating system.

It has an A grade for Trade and Buy & Hold and a B for Peer. It is ranked #15 out of 119 ETFs in the same Technology Equities ETFs group. To see the POWR Ratings of BOTZ, click here.

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BOTZ shares were trading at $32.16 per share on Friday morning, down $0.43 (-1.32%). Year-to-date, BOTZ has gained 13.00%, versus a 24.52% rise in the benchmark S&P 500 index during the same period.

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