President Donald Trump’s latest round of blanket tariffs has cast a shadow over the tech stocks that once fueled the red-hot artificial intelligence (AI) rally.
A clear example is Taiwan Semiconductor Manufacturing Co. Ltd. (ticker: TSM), a critical supplier of the advanced chips that power AI models. The stock is down over 28% year to date as it faces a steep 32% U.S. import tariff, directly threatening its core export business.
In addition, growing concerns about a cooling economy have brought recession fears back to the forefront, which bodes poorly for AI companies that must continuously invest heavily in research, infrastructure and talent before generating meaningful returns.
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The uncertain pace of innovation, paired with fierce competition and ever-present regulatory scrutiny, means there’s no guarantee those investments will pay off in time — or at all.
“Broadly speaking, capital expenditures for AI remain high, however, investors are increasingly scrutinizing the return on investment for these expenditures,” says Arne Noack, regional investment head of Xtrackers, Americas, at DWS Group. “In other words, it will be important to see how adoption of AI will accelerate growth, increase productivity or reduce costs across the economic value chain.”
For investors who still believe in AI’s transformative potential, betting on a single stock might not be the best strategy. Instead, consider spreading your bets across the AI value chain — from semiconductor companies designing the hardware, to the software giants building platforms, to the industrial and health care firms putting AI to work in real-world applications.
“We’re in the early stages of the AI cycle, and proper diversification is extremely important — be it across company stages or geographies — because it’s difficult to pick a winner or two this early,” says Tejas Dessai, director of thematic research at Global X ETFs. “With a thematic exchange-traded fund (ETF), you’re following an idea as opposed to a complex strategy.”
Here are six of the best AI ETFs to buy now:
| Fund | Expense ratio |
| Xtrackers Artificial Intelligence and Big Data ETF (XAIX) | 0.35% |
| Invesco AI and Next Gen Software ETF (IGPT) | 0.58% |
| Global X Artificial Intelligence & Technology ETF (AIQ) | 0.68% |
| Global X Robotics & Artificial Intelligence ETF (BOTZ) | 0.68% |
| Roundhill Generative AI & Technology ETF (CHAT) | 0.75% |
| VistaShares Artificial Intelligence Supercycle ETF (AIS) | 0.75% |
Xtrackers Artificial Intelligence and Big Data ETF (XAIX)
“Many of the existing funds in the market utilize backward-looking mechanisms to determine if a company should be classified as an AI company,” Noack explains. “On the other hand, XAIX’s approach seeks to be forward-looking, as its underlying index screens for approved patents in fields related to AI.” XAIX is also one of the most affordable AI thematic ETFs, thanks to a 0.35% expense ratio.
“With cost reduction and commoditization of large language models, AI users and investors may choose to shift their focus to applications and use cases like software,” Noack explains. “We believe the theme remains relevant and that a diversified portfolio, focusing on companies with strong patent activity, may be an interesting approach.” The ETF holds 95 AI equities and is globally diversified.
Invesco AI and Next Gen Software ETF (IGPT)
“We believe AI remains a compelling long-term growth theme in the U.S., driven by innovation and rising enterprise adoption,” says Rene Reyna, head of thematic and specialty product ETF strategy at Invesco. “However, near-term sentiment is being weighed down by renewed tariff pressures, creating uncertainty for investors in the space.” For AI exposure, Invesco offers IGPT at a 0.58% expense ratio.
“IGPT’s index targets about 100 companies from across the globe that generate revenue from various forms of software and AI, such as data storage, robotics, autonomous vehicles, semiconductors and web platforms,” Reyna says. The ETF is globally diversified and has a tilt toward large-cap growth stocks. Top holdings in IGPT’s portfolio include Alphabet Inc. (GOOG, GOOGL), Meta Platforms Inc. (META) and Nvidia Corp. (NVDA).
Global X Artificial Intelligence & Technology ETF (AIQ)
“AI’s disruption of our economy accelerated overnight, so a persistent sell-off could be an opportunity for investors who have stayed on the sidelines,” Dessai says. To buy the dip, consider AIQ. With around $2.6 billion in assets under management, this thematic ETF is one of the largest in the AI segment. It currently holds 85 companies represented by the Indxx Artificial Intelligence & Big Data Index.
AIQ’s top holdings currently include two Chinese companies — Tencent Holdings Ltd. (80700.HK) and Alibaba Group Holding Ltd. (BABA). This international diversification is crucial in the AI sector, as it allows investors to hedge against competition risk. China’s emergence as a formidable player in AI, exemplified by the rise of companies like DeepSeek, underscores the importance of a global investment approach.
Global X Robotics & Artificial Intelligence ETF (BOTZ)
“When you think about smartphones, laptops or even mobile applications, lower prices and cheaper development costs didn’t shrink the market but expanded it as innovation accelerated,” Dessai explains. “AI could follow the same trajectory, embedding itself into the physical world — from factories and drones to delivery vans and buildings.” To capture this theme, Global X ETFs offers BOTZ.
“We see BOTZ as a more niche play on applied automation,” Dessai says. BOTZ tracks the Global Robotics & Artificial Intelligence Thematic Index, a portfolio of 50 companies spanning not just tech, but also industrials and health care. A standout example is its fourth-largest holding, Intuitive Surgical Inc. (ISRG), which pioneered the Da Vinci robotic surgery system. The ETF has an expense ratio of 0.68%.
Roundhill Generative AI & Technology ETF (CHAT)
Not all AI-themed ETFs rely on passive index tracking. Some, like CHAT, are actively managed, allowing portfolio managers and analysts to select stocks directly. This gives them the flexibility to adjust the portfolio as the AI landscape evolves, rather than being bound by a fixed set of rules. However, the use of active management tends to come at a higher expense ratio, with CHAT charging 0.75%.
“CHAT selects stocks using a proprietary methodology that combines a transcript score and sector score to evaluate companies’ relevance to generative AI, factoring in their revenue, profit and R&D investment in AI technologies,” explains Dave Mazza, CEO at Roundhill Investments. “Companies are then scored and selected based on their exposure to AI, market capitalization and liquidity.”
VistaShares Artificial Intelligence Supercycle ETF (AIS)
A new entrant in the AI-themed ETF space, AIS launched in December and currently manages $8.6 million in assets — small compared to more established peers but worth noting for its differentiated approach. Unlike many AI ETFs that closely mirror broad tech benchmarks filled with the usual suspects like Nvidia, Microsoft Corp. (MSFT), Amazon.com Inc. (AMZN) and Meta Platforms, AIS holds a more diverse set of 83 names.
Top holdings currently include SK Hynix Inc. (000660.KS), which supplies random access memory and flash memory chips to major customers like Microsoft and Apple Inc. (AAPL), and Asustek Computer Inc. (2357.TW), a Taiwanese electronics manufacturer. This unique portfolio gives AIS less overlap with broad market ETFs, which makes it more viable as a satellite holding. AIS charges a 0.75% expense ratio.
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6 of the Best AI ETFs to Buy for 2025 originally appeared on usnews.com
Update 04/09/25: This story was previously published at an earlier date and has been updated with new information.
