WisdomTree Artificial Intelligence and Innovation Fund

WTAI

Market cap $359M

WTAI tracks an AI & innovation index, with a 0.45% expense ratio and 1.75% distribution. The WisdomTree Artificial Intelligence and Innovation Fund now trades at valuations I consider acceptable. WTAI's geographic and infra-sector diversification is finally being rewarded by the market.

The global artificial intelligence ecosystem is forecast to expand 25-fold during the next seven years. With so much money being plowed into AI development, the investment opportunities in this sector are still huge.

NVIDIA Corp.'s (NASDAQ: NVDA) and Eli Lilly and Co.'s (NYSE: LLY) newly announced $1 billion AI co-innovation lab underscores how artificial intelligence is spreading beyond data centers into medicine, and ETF investors are beginning to price that into thematic funds.

As the 2026 market landscape takes shape, artificial intelligence (AI) continues to serve as the primary catalyst for global equity performance.  According to BlackRock's 2026 outlook, AI remains the “dominant theme” for the investment community, fueling a capital-intensive expansion that is fundamentally supporting corporate earnings and broader macroeconomic growth.

Over 2.5 years, The WisdomTree Artificial Intelligence and Innovation Fund ETF has underperformed AI peers (AIQ, CHAT) and even broad tech ETF QQQ, showing weaker total returns and limited downside protection during market drawdowns. Decent diversification, but lower exposure to mega-cap tech and AI-native high-growth names limits upside. WTAI remains a reasonable Hold due to diversification and AI exposure, but past underperformance and structural gaps versus peers suggest no compelling Buy opportunity in the current market environment.

AI hyperscaler capex is set to nearly triple to $1.4T by 2027, fueling a multi-year demand wave for semiconductors and infrastructure. Top AI ETFs - SMH, XSD, SOXX, WTAI and SMHX - offer diversified or targeted exposure to leading beneficiaries of the AI infrastructure buildout. All five highlighted ETFs earn Buy Quant ratings, with strong momentum, low expenses, and high liquidity, making them attractive for both short- and long-term investors.

By Christopher Gannatti, CFA, Global Head of Research; and Samuel Rines, Macro Strategist, Model Portfolios Key Takeaways Nvidia's $5 billion investment in Intel, following Washington's equity stake, marks a seismic shift from subsidies to equity-based industrial policy aimed at de-risking strategic chokepoints in semiconductors.

The WisdomTree Artificial Intelligence and Innovation Fund offers diversified exposure to leading AI companies, primarily in the United States and large-cap tech. WTAI has outperformed the Nasdaq-100 over the past year but underperformed since inception, partly due to launch timing. WTAI is a lower-cost AI ETF, but ARKK offers higher liquidity, tighter spreads, and superior 1-year performance, making it a strong alternative.

I recommend buying WTAI due to surging AI-driven CapEx among tech giants, signaling a structural shift. Nvidia's ecosystem is expanding rapidly, with GPU developers and AI startups multiplying significantly through 2025. Record computer patents and widespread AI adoption among S&P 500 companies underscore the sector's momentum.

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