Artificial intelligence (AI) is anyway and everywhere it seems these days, with popular platforms like OpenAI's ChatGPT captivating investor attention as stocks related to the technology rise higher.
AI is a little different than the trends of recent years like electric vehicles and the metaverse. Instead of predicting how AI will be applied to industries in the future, AI applications are revolutionizing multiple sectors right now.
There are multiple avenues to invest in AI, many of which include trusted technology companies like Google (NASDAQ: GOOGL) and Microsoft (NASDAQ: MSFT), as well as the chipmakers that produce GPUs which enable supercomputers to power complex AI and other machine learning applications, like Nvidia (NASDAQ: NVDA) and Advanced Micro Devices (NASDAQ: AMD).
Like any trend, investing through exchange-traded funds offer a more broad approach to industry gainers instead of placing individual bets on stocks that may or may not succeed in their AI technologies.
According to a survey by Brown Brothers Harriman published Monday, 56% of professional investors are planning to add AI- and robotics-focused ETF strategies to their portfolios this year, up from 46% in 2022.
And there are a lot of ETFs to choose from when it comes to AI, as most broad tech-focused funds hold stocks involved in the industry in some capacity. Plus, there are more focused ETFs that offer a more targeted approach.
Investors looking for a more broad strategy should consider funds like iShares U.S. Technology ETF (NYSE: IYW), which is up nearly 25% year-to-date and holds high exposure to big tech stocks like Apple (NASDAQ: AAPL), Microsoft, Alphabet and Meta Platforms (NASDAQ: META), as well as chipmakers Nvidia, Broadcom (NASDAQ: AVGO) and Texas Instruments (NASDAQ: TXN).
Other broad technology sector ETFs like Technology Select Sector SPDR Fund (NYSE: XLK) and Communications Services Select Sector SPDR Fund (NYSE: XLC) also provide good exposure to big tech companies as well as other stocks that could become players in AI. Both funds are also outperforming the S&P 500 (NYSE: SPY) so far this year, with respective gains of 20% and 21%. The S&P 500 has returned about 7% year-to-date.
For a more targeted approach, investors should consider funds that focus on autonomous tech, like Global X Robotics and Artificial Intelligence ETF (NASDAQ: BOTZ) and iShares Robotics and Artificial Intel Mltsctr ETF (NYSE: IRBO). These two funds are also performing above the broader market with year-to-date gains of 18.6% and 17%, respectively.