The Best 3 Tech ETFs to Buy Now to Capture the AI Wave

Artificial intelligence (AI) has transformed the technology landscape, and AI-driven stocks have soared in recent years.

Even as concerns about a bubble persist, 62% of Americans are confident in the long-term profit potential of AI, according to The Motley Fool’s 2026 AI Investor Outlook report. While this sector still has plenty of room for growth, investing now could prove lucrative in a few years.

However, in such a volatile industry, choosing individual stocks to buy can be difficult. For many people, investing in an AI ETF can be a simpler way to invest in the sector while diversifying your portfolio and mitigating risk.

These three funds focus on AI to varying degrees, fitting a wide variety of portfolios.

1. iShares Future AI and Tech ETF

THE iShares Future AI and Tech ETF (ARTY +2.99%) includes actions that are involved in one way or another in the advancement of AI technology – from AI infrastructure to hardware and software to services and more. It contains 49 stocks, making it a relatively small and focused fund.

Narrower ETFs like this can carry increased risk, especially since AI is already a volatile sector. With only a few dozen stocks, this ETF is less diversified than many others.

That said, more focused funds can also generate above-average returns, as it is less likely that underperforming funds will dilute the ETF’s overall profits. Over the past year, the iShares Future AI and Tech ETF has generated a total return of around 30%, compared to around 18% for the ETF. S&P500 (^GSPC +0.19%).

Most of the holdings in this fund are small-cap stocks, which can be more volatile than their more established counterparts. However, they also have greater room for explosive growth. If the AI ​​sector continues to thrive, these stocks could be poised to generate significant returns.

2. Invesco Semiconductor ETF

THE Invesco Semiconductor ETF (PSI +5.08%) is a different type of AI ETF, in that it is more focused on the foundations of the technology itself. Semiconductors play a critical role in the advancement of AI, especially as the high-powered computers behind the technology create increased demand for specialized hardware.

This fund contains only 30 stocks of companies involved in semiconductor production. Although semiconductors play a role in industries other than AI, this subsector has seen tremendous growth in recent years.

Similar to the iShares Future AI and Tech ETF, this fund offers less diversification than many other funds. However, its limited portfolio could generate higher returns over time. In fact, last year the Invesco Semiconductors ETF generated total returns of around 38%. Since its launch in 2005, its total return has reached 1,660%.

3. Vanguard Information Technology ETF

For those looking to capitalize on the AI ​​wave while mitigating some of the risk and volatility involved in this sector, the Vanguard Information Technology ETF (VGT +0.29%) could be a fantastic option.

This fund is not directly focused on AI stocks, but rather the technology sector as a whole. It contains 322 stocks across all areas of the technology industry, providing broad diversification. Although many of its main titles, notably Nvidia, Micron technologyAnd Advanced microdevices – are heavily involved in AI, it contains hundreds of other actions to balance them.

Although this ETF has consistently generated above-average returns, it has fallen below the other two AI-focused funds on this list. It generated a total return of just under 22% over the past year, only slightly better than the S&P 500’s 18% over that period.

While this ETF’s performance may be closer to average than other AI funds, its additional diversification and broad exposure to the entire technology sector may be attractive tradeoffs for many investors.

AI can be a potentially lucrative industry in the years to come, and investing in AI ETFs can be a smart way to invest in this sector without having to research dozens of individual stocks. Considering your goals and risk tolerance will make it easier to determine which AI ETF is best for your portfolio.