The Best Artificial Intelligence (AI) ETF to Invest $1,000 in Right Now
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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July 16, 2025
10:00 AM
The Motley Fool
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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.
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