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The Best Artificial Intelligence (AI) ETF to Invest $1,000 in Right Now

July 16, 2025
10:00 AM
5 min read
AI Enhanced
investmentmoneystocksfinancialtechnologyconsumer discretionarymarket cyclesseasonal analysis

Key Takeaways

This could be a generational age of innovation, and this may be the best way to ensure your portfolio captures the opportunity.

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5 min read

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investment

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Published

July 16, 2025

10:00 AM

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The Motley Fool

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Key Topics
investmentmoneystocksfinancialtechnologyconsumer discretionarymarket cyclesseasonal analysis

It's worth noting that This could be a generational age of innovation, and this may be the best way to ensure your portfolio captures the opportunity (noteworthy indeed)

You've bably heard a lot of talk artificial intelligence (AI) at this point, but it's for a good reason

AI is advancing at breathtaking speed, and it could mark the start of a golden age in nology, in today's market environment

Furthermore, Over the next decade and beyond, new nologies, ducts, and industries may emerge that were previously just figments of the imagination

Estimates range, but reers generally agree that artificial intelligence will create trillions of dollars in annual economic value

How does someone invest in such a wide-open opportunity

Casting a wide net may be the best way to go

Here's my favorite exchange-traded fund (ETF) to capture AI's investment potential, and why it's a no-brainer to invest $1,000 in today (fascinating analysis), in light of current trends

Moreover, Image source: Getty Images

Invest in AI and other minent growth trends with the Invesco QQQ ETF Since its inception during the dot-com bubble in 1999, the Invesco QQQ ETF (QQQ 0. 10%) has become arguably the leading innovation and nology-focused ETF

However, It tracks the Nasdaq-100, an index of the largest non-financial companies in the Nasdaq Composite

Nology companies tend to list on the Nasdaq stock exchange, so its index and funds that it tend to have high exposure, considering recent developments

The Invesco QQQ has over 57% exposure to nology companies and nearly 20% to the consumer discretionary sector

The ETF is very concentrated; the other market sectors make up the remainder of the fund

Healthcare is the third-largest, accounting for just 5 (an important development), in today's market environment

Furthermore, 8% of the ETF

At the same time, The Invesco QQQ's top 10 holdings are: Company Percentage of Invesco QQQ ETF Nvidia 9 (something worth watching), in today's financial world. 44% Microsoft 8. 79% Apple 7. 48% Amazon 5. 57% Broadcom 5, considering recent developments. 05% Meta Platforms 3

On the other hand, 72% Netflix 3

Moreover, 09% Tesla 2. 66% Costco Wholesale 2 (this bears monitoring)

On the other hand, 50% Alphabet (Class A s) 2. 44% Data source: Invesco, amid market uncertainty

Nevertheless, These companies combine for just over half of the ETF, viding investors with instant exposure to the leading companies in today's growth trends, including AI, cloud computing, digital advertising, ing, and more

Moreover, Strong long-term performance requires a strong stomach When people measure investments, it's often against the S&P 500, the most and widely used stock market index

It's the benchmark people typically refer to when they talk outperforming the market

The Invesco QQQ ETF has outperformed the S&P 500 handily over its lifetime: QQQ data by YCharts Will it continue to outperform

That's anybody's guess, but I would say that, given the world increasingly depends on nology and AI has only just begun, investors can bably anticipate strong performance from the Invesco QQQ ETF over the next decade and beyond, in this volatile climate

However, nothing in life is free, in this volatile climate

The price of the Invesco QQQ ETF's stellar returns is an iron stomach

Moreover, Faster-growing companies, particularly in the nology sector, tend to be more volatile

The ETF's heavy weighting in nology makes it ne to sharper declines than you would ly see from the S&P 500, in this volatile climate

Furthermore, The below chart is similar to the first, except that it shows how deep the historical drawdowns have been for these two stock indexes: QQQ data by YCharts Steep declines can be stressful, so investors who struggle to watch their investments fluctuate should keep that in mind

A severe decline can take years to recover from -- look at the Invesco QQQ ETF's journey in the early 2000s, considering recent developments

What the data shows is Invesco QQQ ETF is an ideal blend of risk and safety Ultimately, its makeup is why the Invesco QQQ is my favorite AI ETF

While the nology sector as a whole can be volatile, the Invesco QQQ ETF represents apximately 100 minent companies

Even if some of them lose their edge over time, the ETF's diversity means it would bably take a complete implosion of American and global nological gress for the ETF to fizzle out (remarkable data)

That doesn't seem ly, in light of current trends

That said, investors should tect their money and peace of mind by maintaining a long-term time horizon, diversifying their portfolio well beyond the Invesco QQQ ETF, and regularly adding new funds so they can buy slowly over time, taking advantage of the inevitable ups and downs that come with in stocks, amid market uncertainty

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors

At the same time, John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors

Justin Pope has no position in any of the stocks mentioned

Moreover, The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Costco Wholesale, Meta Platforms, Microsoft, Netflix, Nvidia, and Tesla (quite telling)

The Motley Fool recommends Broadcom and recommends the ing options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft

The Motley Fool has a disclosure policy.