Roundhill Generative AI & Technology ETF

CHAT

Market cap $746M

Nvidia (NVDA -4.33%) was worth $360 billion at the start of 2023, and less than three years later, it's now the world's largest company with a market capitalization of $4.6 trillion. Its data center chips are responsible for almost all of that value creation, because they are the most powerful in the world for developing artificial intelligence (AI), and demand continues to outstrip supply.

Some of the biggest winners in the stock market over the last three years have been companies riding the rising wave of generative artificial intelligence.

The artificial intelligence revolution is well underway. With so many companies vying for a slice of the pie, picking out the most likely potential winners in this emerging technological sphere can be a challenge.

The US stock market is highly concentrated, with technology and tech-related stocks now comprising about 55% of total market cap. This concentration justifies higher valuation multiples for SPY, as tech companies have stronger margins and more stable earnings than defensive sectors. There is a stark divergence in performance between speculative tech ETFs like ARKK and CHAT versus defensive dividend ETFs such as SCHD and VNQ.

A new Goldman Sachs report reveals how family offices, a collection of the world's wealthy, are investing in hot areas including gold, cryptocurrency and artificial intelligence.

The article highlights the divide between affluent and paycheck-to-paycheck American consumers, emphasizing that affluent spending drives economic resilience. AI-related stocks are powering market gains, while non-AI tech and value stocks lag, masking underlying disparities in market performance. Over 40% of my dividend growth portfolio is in a single sector, justified by fading headwinds from interest rates and new supply, and improving sector fundamentals.

Fed's rate cut and hints of more such moves in 2025 spotlight ETFs like SPVU, RTH, SPSM, XYLD, CHAT and HYDR for growth and income plays.

With a little over three months remaining in 2025, now might be a good time to think about making some portfolio adjustments ahead of the new year. Artificial intelligence (AI) is currently a key driver of stock market returns, and we could still be in the early innings of this tech revolution, so investors who lack exposure might want to make some moves.

I rate CHAT ETF a speculative Buy for high-risk, multi-year investors seeking pure-play exposure to the AI infrastructure CapEx supercycle and Agentic AI adoption. CHAT has delivered top-tier returns, strong fund inflows, and bullish technical momentum, but is highly concentrated in tech and exposed to sector-specific downturns. Valuations are based on forward growth that may not materialize, with high turnover, elevated fees, and reliance on inflows creating structural risks.

CHAT is an actively managed investment strategy designed to provide investors with exposure to AI technology companies, including AI development, cloud infrastructure, and semiconductors, amongst others. The strategy targets long-term capital growth through a tactical investment approach. The Roundhill Generative AI & Technology ETF deploys capital across international equities, providing broad exposure to technology companies.