iShares Future AI & Tech ETF

ARTY

Market cap $1.97B

iShares Future AI & Tech ETF continues to outperform, rising 19.3% since August and doubling assets under management to over $2B. It maintains a concentrated portfolio focused on AI infrastructure—chips, hardware, and data centers—delivering strong momentum and sector-leading returns. Despite high volatility and premium valuation, ARTY offers exceptional liquidity and operational depth, justifying its role as a structural AI investment.

iShares Future AI & Tech ETF is well-diversified for a thematic ETF, with 27% in its top five holdings and 84% of assets in US stocks. Projected earnings growth for ARTY's top holdings could justify current prices if expectations are met, supporting a bullish stance for now. I recommend owning ARTY while closely monitoring volatility and price action, using a disciplined exit strategy to mitigate downside risk if bubble-like conditions emerge.

Core AI funds hold platform companies building and deploying AI, while spillover funds target semiconductors, data centers, cybersecurity, and power infrastructure. Expense ratios for thematic AI ETFs range from 0.35% to 0.75%, with passive index funds typically cheaper than actively managed alternatives.

The artificial intelligence (AI) boom is carrying significant momentum right now, and it's showing no signs of slowing down. A few months ago, Nvidia CEO Jensen Huang said he expects data center operators to spend as much as $4 trillion to upgrade their infrastructure to meet demand from AI developers over the next five years alone.

Artificial intelligence (AI) has been a huge catalyst for the portfolios of many investors over the past several years. Large tech companies are spending hundreds of billions of dollars to build out their AI hardware infrastructure, creating massive winners like semiconductor designer Nvidia.

ARTY offers pure, high-conviction exposure to the AI megatrend, focusing on infrastructure, chips, and software powering artificial intelligence's exponential growth. The ETF is highly concentrated in technology (83%+), with top holdings like AMD, NVIDIA, and Super Micro Computer capturing the AI value chain. Performance has been strong, outpacing the S&P 500 recently, but comes with high volatility, sector risk, and premium valuations reflecting future growth.

AI is driving rapid change, and iShares Future AI & Tech ETF is strategically positioned to capture this growth, up over 40% year to date. Top holdings like Advanced Micro Devices, NVIDIA, and Palantir are well-positioned for AI infrastructure and generative AI growth. The fund's higher expense ratio is justified by unique international exposure and strong liquidity, making it accessible for retail investors.

Investors can earn a reliable, practically risk-free annual return of up to 5% by purchasing U.S. government bonds, or they can invest in the S&P 500 (^GSPC -0.12%) index, which has delivered a compound annual return of 10.5% since its inception in 1957. But volatility is the price we pay for higher returns in the stock market, so investors will have to stomach regular sell-offs along the way, which sometimes exceed 20%.

As AI surges and tariffs loom, ETFs like BOTZ, MAGS, VIG and GLD are emerging as top picks for the rest of 2025.

Artificial intelligence could define this decade. These seven AI ETFs provide investors with well-rounded exposure as this technology comes into its own.