Investors looking to tap into the rapidly growing artificial intelligence (AI) industry can benefit from investing in an exchange-traded fund (ETF) that holds multiple top-performing AI stocks. The iShares Expanded Tech Sector ETF, which tracks the technology sector overall, has a relatively broad portfolio of 276 stocks, including Meta Platforms, Nvidia, and Apple.
These three companies are expected to be at the forefront of AI innovation in the long term. Meta is developing advanced large language models, while Nvidia’s graphics processors are being used by companies to develop AI applications. Meanwhile, Apple’s new AI-powered software has been launched, introducing features such as image generation and text summarization.
Investing in a diversified ETF like iShares can offer exposure to the value created by AI without exposing investors to severe losses if individual companies fail. The fund has delivered an accelerated compound annual gain of 20.1% over the last decade, driven by the widespread adoption of technologies such as cloud computing and enterprise software.
However, it’s essential to note that even top-performing ETFs like iShares come with risks. Historically, high-growth stocks have not always lived up to expectations. Nevertheless, the potential for AI-driven growth is significant, with predictions suggesting that the technology will add $7 trillion to the global economy over the coming decade.
To illustrate the potential returns of investing in the iShares ETF, a monthly investment of $500 could grow to $1 million over 30 years, assuming an annual return of 10.9%. While this growth scenario is unlikely to be sustained in the long term, it highlights the immense potential of AI-driven investments.
Investors should consider diversifying their portfolio by also investing in other funds and individual stocks, rather than relying solely on a single ETF like iShares. This approach can help mitigate risks while still tapping into the vast opportunities presented by the rapidly evolving AI industry.
Source: https://www.fool.com/investing/2024/12/17/nvidia-apple-help-etf-turn-500-per-month-1-million