3 Thematic ETFs for the AI Revolution

Artificial intelligence has been one of the most impactful technologies released, and it’s only getting better. People can use prompts to create video games, produce lines of code, generate videos, and receive detailed answers to various questions. AI models like ChatGPT and Grok can generate quizzes on any subject, provide personalized advice on any topic, and brainstorm new ideas. 

A lot of money is flowing into this industry. Consumers are buying subscription plans for advanced versions of AI tools, and tech giants continue to throw money at semiconductor chips and other parts of the AI bottleneck. Investors can profit from this movement of capital by investing in different AI stocks and ETFs. These are some of the top thematic ETFs for people who want a simple path to AI opportunities.

CoinShares Bitcoin Mining ETF

The CoinShares Bitcoin Mining ETF (NASDAQ:WGMI) is one of the hidden gems in the AI boom. Bitcoin (CRYPTO:BTC) mining may not seem correlated with AI infrastructure, but crypto miners happen to have the perfect infrastructure for AI data centers. AI apps require substantial energy to operate, and AI data centers solve that problem. They are different from traditional data centers, which are primarily built for general tasks like storing data and hosting websites.

This fund is up by more than 70% over the past year and has IREN (NASDAQ:IREN), Cipher Mining (NASDAQ:CIFR), and Hut 8 (NASDAQ:HUT) as its top holdings. They make up almost half of the entire portfolio, and its top 10 holdings consist of more than 80% of the fund’s entire assets. WGMI only has 24 holdings, but that has been enough to outpace the S&P 500 over the past year. As the AI buildout continues and more tech giants need AI data centers, this ETF should continue to rally.

VanEck Semiconductor ETF

The VanEck Semiconductor ETF (NASDAQ:SMH) gives investors exposure to semiconductor stocks. While this sector was already a top-performer before AI chips went mainstream, its gains in recent years have accelerated. The fund has produced an annualized 33.8% return over the past decade, and that includes an annualized 49.3% return over the past three years.

AI chips are the backbone of AI tools. That includes software products like ChatGPT and physical AI like Waymo’s self-driving cars. The fund prioritizes the leaders, with Nvidia (NASDAQ:NVDA | NVDA Price Prediction), Taiwan Semiconductor Manufacturing (NYSE:TSM), and Broadcom (NASDAQ:AVGO) leading the way. These three picks make up more than one-third of SMH’s total assets, with the top 10 holdings making up almost 75% of the entire portfolio. It’s yet another top-heavy fund with a small number of stocks, but that hasn’t stopped it from consistently crushing the S&P 500.

Roundhill Generative AI & Technology ETF

The Roundhill Generative AI & Technology ETF (NYSEARCA:CHAT) prioritizes generative AI stocks. It’s the most diversified ETF on the list, with a mix of software stocks, AI chipmakers, and other key players in the AI boom. Many tech giants make up this fund, with Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL), Nvidia, and Microsoft (NASDAQ:MSFT) being the top three positions. The fund’s top 10 holdings make up more than 40% of its total assets. 

Roundhill cites OpenAI’s rapid market share gains as a key reason to buy generative AI stocks. OpenAI’s ChatGPT became one of the fastest applications in history to reach 100 million users. It’s easier for businesses to use AI to enhance operations, and savvy entrepreneurs can use this technology to create new businesses much faster. While the first two ETFs offer niche AI exposure, this ETF gives investors more variety.