1 No-Brainer Artificial Intelligence (AI) ETF to Buy With $50 and Hold for the Long Term

This ETF could supercharge a diversified portfolio

It’s difficult to have confidence in the track record of an ETF that has traded for less than two years. Nevertheless, the iShares A.I. Innovation and Tech Active ETF has delivered an impressive return of 76% since it launched in October 2024, while the S&P 500 is up just 31% over the same period.

It’s unrealistic to expect the ETF to continue outperforming the broader market by such a wide margin, but by all accounts, the AI boom is still in the very early stages. Nvidia says the five largest hyperscalers (which include Alphabet, Microsoft, and Amazon) are on track to spend nearly $800 billion combined on AI infrastructure during 2026, followed by another $1.3 trillion in 2027. If that plays out as expected, most chip stocks will probably be trading much higher in a year from now.

Plus, Nvidia CEO Jensen Huang says both compute and tokens are now very profitable. That means hyperscalers are starting to see a return on their capital investments, and AI labs like Anthropic and OpenAI are also making money when customers deploy their AI models. This is important because it increases the chances that the AI boom will be sustainable over the long term.

Investors shouldn’t bet the farm on this iShares ETF because its holdings are so highly concentrated, but it could be a great addition to a diversified portfolio that doesn’t already have a high degree of exposure to AI stocks.

Should you buy stock in Blackrock ETF Trust – iShares A.i. Innovation And Tech Active ETF right now?

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Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Broadcom, CrowdStrike, Micron Technology, Microsoft, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Palo Alto Networks. The Motley Fool has a disclosure policy.

1 No-Brainer Artificial Intelligence (AI) ETF to Buy With $50 and Hold for the Long Term was originally published by The Motley Fool