Struggling to Pick Artificial Intelligence (AI) Stocks? You’re Not Alone — Try This ETF Instead
Artificial intelligence (AI) is one of the fastest-moving technologies in history, and while that creates substantial opportunities for investors, it also breeds volatility. For example, Micron Technology(NASDAQ: MU) stock has soared by a staggering 348% over the past 12 months, fueled by more demand for the company’s data center memory chips than it can possibly supply.
But then you have the following high-quality AI stocks that are down sharply from their 52-week highs:
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Oracle‘s stock is down 54%.
Microsoft‘s stock is down 26%.
Advanced MicroDevices‘ stock is down 24%.
Amazon‘s stock is down 17%.
Even Nvidia, which is the undisputed leader in the AI semiconductor space, has lost 8% of its peak value recently. Therefore, it’s not easy to decide which AI stocks to buy from here, particularly for long-term investors who don’t have time to keep up with the rapid shifts in the AI landscape. That’s why buying an exchange-traded fund (ETF) might be a better solution.
The iShares Future AI and Tech ETF (NYSEMKT: ARTY) holds 49 leading stocks from different segments of the AI industry, eliminating the need for investors to pick winners and losers. Here’s why it could be a great addition to a diversified portfolio.
Image source: Getty Images.
The iShares Future AI and Tech ETF aims to give investors exposure to the entire AI value chain by investing in suppliers of chips and data center infrastructure, developers of AI software, providers of AI services, and more. It has a global mandate, which means it can invest in both U.S. and international stocks.
Below, I’ve put together a list of 10 of the most prominent and most recognizable stocks in this ETF, and their respective portfolio weightings.
Stock
iShares ETF Portfolio Weighting
Micron Technology
7.61%
Taiwan Semiconductor Manufacturing
5.51%
Nvidia
4.63%
Advanced Micro Devices
3.98%
Broadcom
3.68%
CoreWeave
3.65%
Oracle
2.95%
Microsoft
2.14%
Palantir Technologies
1.90%
Snowflake
1.57%
Data source: iShares. Portfolio weightings are accurate as of Feb. 20, 2026, and are subject to change.
Micron is the largest position in the iShares ETF. It supplies high-bandwidth memory for data centers, which Nvidia and AMD have embedded into their latest graphics processing units (GPUs) to help manage AI workloads. A high memory capacity keeps data flowing to the GPU, alleviating bottlenecks to unlock maximum processing speeds.
Nvidia’s GPUs are the best in the world for developing AI, but AMD’s rival chips are quickly catching up in terms of performance. Then there is Broadcom, which helps hyperscalers design and manufacture custom data center chips called AI accelerators. They are increasingly popular because they can be tailored to specific workloads.
On the software side, Microsoft developed an AI assistant called Copilot, which is embedded into almost all of its existing products, including Windows and 365 (Word, Excel, and Outlook), where it can boost productivity. Palantir Technologies, on the other hand, offers a series of software platforms that use AI to help businesses and government organizations extract significant value from their internal data.
Investing in this mix of AI stocks through the iShares ETF is not only simple, but it’s also cost-effective. The fund has an expense ratio of 0.47%, and while that is high compared to passive index funds that track the S&P 500(SNPINDEX: ^GSPC), it means an investment of $10,000 will incur an annual fee of just $47.
As I mentioned at the top, Micron stock has been ripping higher lately while many other leading AI stocks have declined. The net result for the iShares ETF was a 28.5% return over the last 12 months, which was double the return of the S&P 500 during the same period.
But one concern is the iShares ETF’s relatively short track record in its current form. It was established in 2018 with a focus on AI and robotics, but it was completely restructured in August 2024 to invest more exclusively in AI alone. As a result, while it has delivered strong returns so far, they are unlikely to be a very reliable indicator of its future performance.
With that said, the ETF should do well as long as the AI industry continues to deliver broad progress. That doesn’t mean investors should bet the farm here, because they will be exposed to severe declines if the AI revolution hits a speed bump. Instead, this fund would be a great addition to a diversified portfolio of other ETFs and individual stocks, which doesn’t already have a high exposure to the AI theme.
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Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Amazon, Micron Technology, Microsoft, Nvidia, Oracle, Palantir Technologies, Snowflake, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.
