The artificial intelligence revolution is already here, creating a massive opportunity for AI ETFs. According to Grand View Research, the global AI boom could grow from about $137 billion in 2022 to more than $1.81 trillion by 2030. And according to Marketing AI Institute, “Artificial intelligence will, on average, boost rates of profitability by 38% and provide an economic boost of $14 trillion in additional gross value by 2035,” according to research by Accenture.
Even MIT Technology Review said, “Artificial intelligence is changing the world and doing it at breakneck speed. The experts go on to predict a 50 percent chance that AI will be better than humans at more or less everything in about 45 years.”
It’s already impacting every sort of business, governments, schools, law enforcement, gaming, robotics, weaponry, cybersecurity, the environment, stocks; the list goes on…
Yet, this is only the start – and its potential impact on your portfolio could be significant.
In fact, here are seven top AI ETFs that could help.
Global X Robotics & Artificial Intelligence ETF (BOTZ)
One of the top AI ETFs to consider is the Global X Robotics & Artificial Intelligence ETF (NASDAQ:BOTZ). With an expense ratio of 0.68%, The Global X Robotics & Artificial Intelligence ETF invests in companies that will benefit from increased adoption and utilization of robotics and artificial intelligence, including those involved with industrial robotics and automation, non-industrial robots, and autonomous vehicles, according to Global X.
Some of its top holdings include NVIDIA (NASDAQ:NVDA), Intuitive Surgical (NASDAQ:ISRG), SMC Corporation (OTCMKTS:SMCAY), iRobot Corporation (NASDAQ:IRBT), Accuray Inc. (NASDAQ:ARAY), and Brooks Automation (NASDAQ:AZTA). Since the year began, shares of the BOTZ ETF ran from about $21 to $25.05 so far. By year-end, I’d like to see it closer to $35.
ROBO Global Artificial Intelligence ETF (THNQ)
Another of the top AI ETFs is ROBO Global Artificial Intelligence ETF (NYSEARCA:THNQ), which invests in companies leading the AI revolution. THNQ includes companies developing the technology and infrastructure enabling AI, such as computing, data, and cloud services, as well as companies that apply AI in various verticals, from business processes to e-commerce and healthcare.
With an expense ratio of 0.75%, the THNQ ETF offers me exposure to Nvidia, Twilio (NYSE:TWLO), Atlassian Corp. (NASDAQ:TEAM), Splunk (NASDAQ:SPLK), Cloudflare (NYSE:NET), C3.ai (NYSE:AI), Amazon (NASDAQ:AMZN), Microsoft (NASDAQ:MSFT), and 61 other AI-related holdings. Since the start of the year, the THNQ ETF ran from about $26.50 to $31.92. I want to see it at $40.
Global X Autonomous & Electric Vehicles ETF (DRIV)
One of the best ways to diversify your AI ETFs portfolio, as it applies to electric vehicles, is with an ETF, such as the Global X Autonomous & Electric Vehicles ETF (NASDAQ:DRIV). In fact, the DRIV ETF tracks an index that uses artificial intelligence to select global stocks involved in the development, production, or supporting technology of autonomous and electronic vehicles. With an expense ratio of 0.68%, some of its top holdings include Tesla (NASDAQ:TSLA), Nio (NYSE:NIO), Qualcomm (NASDAQ:QCOM), NVIDIA, Apple (NASDAQ:AAPL), Microsoft, Advanced Micro Devices (NASDAQ:AMD), and Toyota Motor (NYSE:TM); it does so at less cost.
Since Jan, the DRIV ETF accelerated from about $20 a share to $23.09. I’d like to see this one closer to $40 a share, too, as the EV and AI stories get hot.
iShares Self-Driving EV and Tech ETF (IDRV)
Another top ETF to consider is the iShares Self-Driving EV and Tech ETF (NYSEARCA:IDRV). With an expense ratio of 0.47%, you gain exposure to stocks such as Tesla, Qualcomm, NVIDIA, Apple, General Motors (NYSE:GM), and Alphabet (NASDAQ:GOOG, GOOGL). Over the last few months, the ETF has jumped from $35 to $37 and could see higher highs as the EV boom continues to accelerate. After all, autonomous need to use artificial intelligence to drive, along with sensors, cameras, and radar, to travel without a human behind the wheel.
iShares Robotics and Artificial Intelligence ETF (IRBO)
Since Jan., the iShares Robotics and Artificial Intelligence ETF (NYSEARCA:IRBO) ram from about $25 to $30. This is another one that could see $40 as the AI story unfolds. With an expense ratio of 0.47%, the ETF provides exposure to companies at the forefront of robotics and artificial intelligence innovation, including Meitu Inc., IQIYI (NASDAQ:IQ), Meta Platforms (NASDAQ:META), Nvidia, MicroStrategy (NASDAQ:MSTR), and another 112 different AI-related holdings. All for just $30.49 a share.
First Trust NASDAQ AI and Robotics ETF (ROBT)
Or, take a look at the First Trust NASDAQ AI and Robotics ETF (NASDAQ:ROBT). With an expense ratio of 0.65%, ROBT tracks companies engaged in robotics, AI, and automation.
To be included in the ETF, a company must be considered: An enabler or a company that develops the building block components for robotics or AI, such as advanced machinery, autonomous systems/self-driving vehicles, semiconductors, and databases used for machine learning; An engager, or a company that designs robotics and AI in the form of products, software, or systems; Or an enhancer, which is a company that provides value-added services within the AI and robotics ecosystem.
Some of its top holdings include AeroVironment (NASDAQ:AVAV), Illumina (NASDAQ:ILMN), UiPath (NYSE:PATH), and Ciena Corp (NYSE:CIEN).
WisdomTree U.S. AI Enhanced Value Fund (AIVL)
The WisdomTree U.S. AI Enhanced Value Fund (NYSEARCA:AIVL) is a bit different. It doesn’t invest in AI stocks. Instead, it uses AI to invest. In fact, it uses an AI algorithm to invest in value stocks.
With an expense ratio of 0.38%, AIVL uses “a proprietary, quantitative artificial intelligence model” developed by Voya Investment Management, which sub-advises the fund, according to the ETF’s prospectus. Also, to be eligible for inclusion in the Parent Universe, a company must (i) be listed on a U.S.-based stock exchange, (ii) have a market capitalization of at least $100 million, (iii) have an average daily volume of at least $100,000, and (iv) have an average six months aggregate daily trading volume of 250,000 shares.
Also, the AI model typically chooses stocks with lower price-to-book ratios, lower price-to-earnings ratios, and greater free cash flow. At the end of 2022, some of those very stocks included Comcast (NASDAQ:CMCSA), Medtronic (NYSE:MDT), Abbott Laboratories (NYSE:ABT), Roper Technologies (NYSE:ROP), and Keurig Dr. Pepper (NASDAQ:KDP), to name a few of them.
On the date of publication, Ian Cooper did not have (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
