As we approach the new year, many investors are looking for opportunities to enhance their portfolios, particularly in the rapidly growing artificial intelligence (AI) sector. The performance of AI stocks like Nvidia (NASDAQ: NVDA) and Palantir Technologies (NYSE: PLTR) has significantly influenced the stock market’s trajectory, making 2025 a pivotal year for these investments. With AI expected to maintain its dominance in the market, investors must consider their options carefully.
The Rise of AI ETFs
Exchange-traded funds (ETFs) focusing on AI offer a strategic approach for those looking to capitalize on this trend without the complexity of selecting individual stocks. Two notable ETFs to consider are the Roundhill Generative AI and Technology ETF (NYSEMKT: CHAT) and the iShares Future AI and Tech ETF (NYSEMKT: ARTY). Each provides distinct exposure to the AI landscape and has shown strong performance in 2025, making them valuable additions to a diversified investment strategy.
Roundhill Generative AI and Technology ETF (CHAT)
The Roundhill ETF is actively managed, focusing on companies that create the infrastructure and software driving the AI revolution. It currently holds 49 stocks, with the top five comprising a significant portion of the portfolio:
- Alphabet (GOOGL): 7.53%
- Nvidia (NVDA): 6.11%
- Microsoft (MSFT): 5.13%
- Meta Platforms (META): 4.28%
- Palantir Technologies (PLTR): 3.67%
These leaders have collectively produced an average return of 56% in 2025, contributing to a 47% gain for the Roundhill ETF, which vastly outperformed the S&P 500’s 17% increase.
iShares Future AI and Tech ETF (ARTY)
On the other hand, the iShares ETF takes a broader approach by investing in AI companies globally, encompassing the entire value chain from infrastructure to software. It holds 51 stocks, with the following top five positions:
- Advanced Micro Devices (AMD): 5.48%
- Vertiv Holdings (VRT): 5.25%
- Nvidia (NVDA): 4.28%
- Advantest Corp (ATEYY): 4.06%
- Broadcom (AVGO): 3.96%
Although ARTY and CHAT share a focus on AI, their top holdings differ, emphasizing various aspects of the industry. The iShares ETF boasts a competitive expense ratio of 0.47% and has delivered a remarkable 28% return this year, significantly surpassing the S&P 500.
Conclusion
Investing in AI-focused ETFs like the Roundhill Generative AI and Technology ETF (CHAT) and the iShares Future AI and Tech ETF (ARTY) can simplify the process for investors eager to tap into the booming AI sector. With AI likely to remain a significant market driver in 2026, these funds represent an excellent opportunity for portfolio diversification and growth.
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