3 Of the Best ETFs to Buy for AI Stocks Exposure

Advertisement

  • Carve out a portion of your portfolio for a few top AI ETFs to buy and hold.
  • Global X Robotics & Artificial Intelligence ETF (BOTZ): The ETF invests in companies that benefit from increased adoption of robotics and AI.
  • ROBO Global Artificial Intelligence ETF (THNQ): It invests in companies developing technology and infrastructure that enables AI.
  • First Trust NASDAQ AI and Robotics ETF (ROBT): The firm tracks companies engaged in robotics, AI and automation.
AI ETFs - 3 Of the Best ETFs to Buy for AI Stocks Exposure

Source: SWKStock / Shutterstock

One of the best ways to gain maximum exposure to the unstoppable artificial intelligence boom is with an exchange-traded fund (ETF). Not only do they expose your portfolio to dozens of top AI names, but also these AI ETFs do so for far less cost.

For example, if I were to buy 100 shares of Advanced Micro Devices (NASDAQ:AMD) at the moment, it would cost me just under $17,900. And while AMD is well worth the investment, that’s still a good chunk of money to put down on a single stock.

Instead, I can pick up 100 shares of the Global X Artificial Intelligence & Technology ETF (NASDAQ:AIQ) and pay about $3,700.

By doing so, not only am I now exposed to AMD, but I’m also exposed to 85 total ETF holdings. Those include Nvidia (NASDAQ:NVDA), Meta Platforms (NASDAQ:META), Oracle (NYSE:ORCL) and Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) to name a few. And while you can always invest in any of those individual names, it’ll cost you far more than the ETF.

Nonetheless, let’s explore some of the top AI ETFs you may want to jump into today.

Global X Robotics & Artificial Intelligence ETF (BOTZ)

a robot built in the essence of a human raising its hand to its chin implying deep thought. future tech stocks. AI stocks
Source: Phonlamai Photo / Shutterstock.com

With an expense ratio of 0.68%, Global X Robotics & Artificial Intelligence ETF (NASDAQ:BOTZ) invests in companies that can benefit from increased adoption of robotics and artificial intelligence (AI). Those include industrial robotics and automation, non-industrial robots and autonomous vehicles, according to Global X.

BOTZ provides investors with exposure to more stocks for less money.  For example, 100 shares of the BOTZ ETF would cost just over $3,100. It would provide exposure to dozens of top-rated AI stocks on the market. To contrast, 100 shares of Nvidia (NASDAQ:NVDA) would cost $12,800, with exposure only to NVDA.

ROBO Global Artificial Intelligence ETF (THNQ)

a highway interchange as viewed from above
Source: Shutterstock

ROBO Global Artificial Intelligence ETF (NYSEARCA:THNQ) invests in companies developing the technology and infrastructure enabling AI. Those include 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%, THNQ offers exposure to Nvidia, Microsoft (NASDAQ:MSFT), Palo Alto Networks (NASDAQ:PANW), Cloudflare (NYSE:NET), Rapid7 (NASDAQ:RPD) and 53 other holdings. 

However, don’t buy it just yet. After running from about $32 to a recent high of $46.35, it has become technically overbought on RSI, MACD and Williams’ %R.

Wait to buy THNQ on the next pullback since it is overdue for some healthy profit-taking. If you pull up a two-year chart with these technical indicators, you’ll see that when they become this overbought, the ETF dips. Therefore, wait for that next dip before buying to be safe.

First Trust NASDAQ AI and Robotics ETF (ROBT)

An image of a hand turning a dial from 'manual' to 'robotic process automation'
Source: Iurii Motov/Shutterstock

With an expense ratio of 0.65%, First Trust NASDAQ AI and Robotics ETF (NASDAQ:ROBT) tracks companies engaged in robotics, AI and automation. 

To be included in the ETF, a company must be considered as an enabler. This would be a company that develops the building block components for robotics or AI. These parts could include advanced machinery, autonomous systems/self-driving vehicles, semiconductors and databases used for machine learning (ML). An engager, or a company that designs robotics and AI in the form of products, software or systems, is another consideration for the ETF. Finally, an enhancer, or a company providing value-added services within the AI and robotics ecosystem, would be accepted. 

Top holdings include AeroVironment (NASDAQ:AVAV), Illumina (NASDAQ:ILMN), UiPath (NYSE:PATH), and Ciena Corp. (NYSE:CIEN).

After finding support at $41.60 (where it’s a buy), the ROBT ETF is just starting to push higher. Last trading at $42.80, I’d like to see the ETF initially retest $47 near term.

On the date of publication, Ian Cooper did not hold (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.

On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.

Ian Cooper, a contributor to InvestorPlace.com, has been analyzing stocks and options for web-based advisories since 1999.


Article printed from InvestorPlace Media, https://investorplace.com/2024/07/3-of-the-best-etfs-to-buy-for-ai-stocks-exposure/.

©2024 InvestorPlace Media, LLC