Best AI ETFs to Buy for 2025
Best AI ETFs to Buy for 2025
January ended with a seismic shift for U.S. stocks, as markets collectively shed nearly $1 trillion in market capitalization.
The rout was led by chipmaker Nvidia Corp. (ticker: NVDA), which plunged nearly 17% in intraday trading on Jan. 27, wiping out more than $590 billion in market cap – the largest single-day loss for any publicly listed company in history.
The catalyst? A bombshell report revealed that a Chinese startup had developed a new artificial intelligence model called DeepSeek. While competition risk has always loomed large for AI investors, the launch of DeepSeek made the threat tangible.
Experts note that DeepSeek uses a "chain-of-thought" reasoning process, enabling it to outperform leading models from Anthropic and OpenAI across several benchmarks.
What shocked analysts most was the price tag behind its outperformance: Unlike the billions in capital expenditures on GPUs and data centers by American tech giants, DeepSeek reportedly cost less than $6 million to develop.
"DeepSeek has reportedly trained its high-performance chatbot at a fraction of the cost without using prevailing U.S. technology," says Thomas DiFazio, ETF strategist at Roundhill Investments. "The market's knee-jerk reaction was decidedly negative, but time is needed for the dust to settle and determine what the actual fundamental impact on the AI industry will be."
As this story unfolds, experts remain divided on whether DeepSeek is a true disruptor or merely a paper tiger. But one thing is clear: AI investors are taking competition risk far more seriously.
A downstream consequence of this may be renewed interest in AI exchange-traded funds, ETFs. Thanks to their diversification, these funds weathered the recent Nvidia-led downturn far better than individual stocks, making them an attractive option for mitigating risk in this fast-moving sector.
"We're in the early stages of the AI cycle, and proper diversification is extremely important – be it across company stages or geographies – because it's difficult to pick a winner or two this early," says Tejas Dessai, director of thematic research at Global X ETFs. "With a thematic ETF, you're following an idea as opposed to a complex strategy."
Here are six of the best AI ETFs to buy now:
AI ETF Expense ratio
Xtrackers Artificial Intelligence and Big Data ETF (XAIX) 0.35%
Global X Artificial Intelligence & Technology ETF (AIQ) 0.68%
Global X Robotics & Artificial Intelligence ETF (BOTZ) 0.68%
Global X Data Center & Digital Infrastructure ETF (DTCR) 0.50%
Invesco AI and Next Gen Software ETF (IGPT) 0.58%
Roundhill Generative AI & Technology ETF (CHAT) 0.75%
The rout was led by chipmaker Nvidia Corp. (ticker: NVDA), which plunged nearly 17% in intraday trading on Jan. 27, wiping out more than $590 billion in market cap – the largest single-day loss for any publicly listed company in history.
The catalyst? A bombshell report revealed that a Chinese startup had developed a new artificial intelligence model called DeepSeek. While competition risk has always loomed large for AI investors, the launch of DeepSeek made the threat tangible.
Experts note that DeepSeek uses a "chain-of-thought" reasoning process, enabling it to outperform leading models from Anthropic and OpenAI across several benchmarks.
What shocked analysts most was the price tag behind its outperformance: Unlike the billions in capital expenditures on GPUs and data centers by American tech giants, DeepSeek reportedly cost less than $6 million to develop.
"DeepSeek has reportedly trained its high-performance chatbot at a fraction of the cost without using prevailing U.S. technology," says Thomas DiFazio, ETF strategist at Roundhill Investments. "The market's knee-jerk reaction was decidedly negative, but time is needed for the dust to settle and determine what the actual fundamental impact on the AI industry will be."
As this story unfolds, experts remain divided on whether DeepSeek is a true disruptor or merely a paper tiger. But one thing is clear: AI investors are taking competition risk far more seriously.
A downstream consequence of this may be renewed interest in AI exchange-traded funds, ETFs. Thanks to their diversification, these funds weathered the recent Nvidia-led downturn far better than individual stocks, making them an attractive option for mitigating risk in this fast-moving sector.
"We're in the early stages of the AI cycle, and proper diversification is extremely important – be it across company stages or geographies – because it's difficult to pick a winner or two this early," says Tejas Dessai, director of thematic research at Global X ETFs. "With a thematic ETF, you're following an idea as opposed to a complex strategy."
Here are six of the best AI ETFs to buy now:
AI ETF Expense ratio
Xtrackers Artificial Intelligence and Big Data ETF (XAIX) 0.35%
Global X Artificial Intelligence & Technology ETF (AIQ) 0.68%
Global X Robotics & Artificial Intelligence ETF (BOTZ) 0.68%
Global X Data Center & Digital Infrastructure ETF (DTCR) 0.50%
Invesco AI and Next Gen Software ETF (IGPT) 0.58%
Roundhill Generative AI & Technology ETF (CHAT) 0.75%
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Re: Best AI ETFs to Buy for 2025
Xtrackers Artificial Intelligence and Big Data ETF (XAIX)
"With cost reduction and commoditization of large language models, AI users and investors may choose to shift their focus to applications and use cases like software," explains Arne Noack, regional investment head of Xtrackers, Americas, at DWS Group. "We believe the theme remains relevant and that a diversified portfolio, focusing on companies with strong patent activity, may be an interesting approach."
To put this strategy into play, Xtrackers offers XAIX at a reasonable 0.35% expense ratio. "Many of the existing funds in the market utilize backward-looking mechanisms to determine if a company should be classified as an AI company," Noack explains. "On the other hand, XAIX's approach seeks to be forward-looking, as its underlying index screens for approved patents in fields related to AI."
"With cost reduction and commoditization of large language models, AI users and investors may choose to shift their focus to applications and use cases like software," explains Arne Noack, regional investment head of Xtrackers, Americas, at DWS Group. "We believe the theme remains relevant and that a diversified portfolio, focusing on companies with strong patent activity, may be an interesting approach."
To put this strategy into play, Xtrackers offers XAIX at a reasonable 0.35% expense ratio. "Many of the existing funds in the market utilize backward-looking mechanisms to determine if a company should be classified as an AI company," Noack explains. "On the other hand, XAIX's approach seeks to be forward-looking, as its underlying index screens for approved patents in fields related to AI."
Re: Best AI ETFs to Buy for 2025
Global X Artificial Intelligence & Technology ETF (AIQ)
"DeepSeek's claim of using fewer GPUs doesn't erase a key fact that they're still reliant on Nvidia hardware, so U.S. semiconductor dominance remains the bottleneck for China's ambitions," Dessai argues. "While necessity fuels innovation, and China has been aggressive with their algorithmic progress, they will still need access to chips and processors to be able to defend their leadership for the long run."
Investors who agree with Dessai can double down on U.S. AI exposure with AIQ. This ETF tracks 85 companies represented by the Indxx Artificial Intelligence & Big Data Index. Top holdings currently include Meta Platforms Inc. (META), Apple Inc. (AAPL), Alphabet Inc. (GOOGL), Amazon.com Inc. (AMZN) and numerous other chipmakers and software developers. AIQ charges a 0.68% expense ratio.
"DeepSeek's claim of using fewer GPUs doesn't erase a key fact that they're still reliant on Nvidia hardware, so U.S. semiconductor dominance remains the bottleneck for China's ambitions," Dessai argues. "While necessity fuels innovation, and China has been aggressive with their algorithmic progress, they will still need access to chips and processors to be able to defend their leadership for the long run."
Investors who agree with Dessai can double down on U.S. AI exposure with AIQ. This ETF tracks 85 companies represented by the Indxx Artificial Intelligence & Big Data Index. Top holdings currently include Meta Platforms Inc. (META), Apple Inc. (AAPL), Alphabet Inc. (GOOGL), Amazon.com Inc. (AMZN) and numerous other chipmakers and software developers. AIQ charges a 0.68% expense ratio.
Re: Best AI ETFs to Buy for 2025
Global X Robotics & Artificial Intelligence ETF (BOTZ)
"When you think about smartphones, laptops or even mobile applications, lower prices and cheaper development costs didn't shrink the market but expanded it as innovation accelerated," Dessai explains. "AI could follow the same trajectory, embedding itself into the physical world – from factories and drones to delivery vans and buildings." To capitalize on this demand, Global X ETFs offers BOTZ.
"We see BOTZ as a more niche play on applied automation," Dessai says. While the ETF's largest holding is Nvidia, it also features numerous other industrial and health care companies deploying AI and robotics to enhance outcomes. Notably, BOTZ's second-largest holding is Intuitive Surgical Inc. (ISRG), famed for its surgical robots. This ETF charges a 0.68% expense ratio, the same as AIQ.
"When you think about smartphones, laptops or even mobile applications, lower prices and cheaper development costs didn't shrink the market but expanded it as innovation accelerated," Dessai explains. "AI could follow the same trajectory, embedding itself into the physical world – from factories and drones to delivery vans and buildings." To capitalize on this demand, Global X ETFs offers BOTZ.
"We see BOTZ as a more niche play on applied automation," Dessai says. While the ETF's largest holding is Nvidia, it also features numerous other industrial and health care companies deploying AI and robotics to enhance outcomes. Notably, BOTZ's second-largest holding is Intuitive Surgical Inc. (ISRG), famed for its surgical robots. This ETF charges a 0.68% expense ratio, the same as AIQ.
Re: Best AI ETFs to Buy for 2025
Global X Data Center & Digital Infrastructure ETF (DTCR)
"AI's disruption of our economy accelerated overnight, so a persistent sell-off could be an opportunity for investors who have stayed on the sidelines," Dessai says. For an alternative spin on AI investing, consider DTCR. This ETF tracks the Solactive Data Center REITs & Digital Infrastructure Index, which focuses on the real estate investment trusts (REITs) and technology companies delivering the physical backbone of the AI ecosystem.
The best way to think about DTCR is as a "new age" real estate fund. Instead of the usual office, residential and retail real estate stocks, DTCR focuses on data centers like Equinix Inc. (EQIX) and Digital Realty Trust Inc. (DLR), along with cell tower owners like American Tower Corp. (AMT) that are heavily involved with 5G. The ETF charges a 0.5% expense ratio and has a total of 26 holdings.
"AI's disruption of our economy accelerated overnight, so a persistent sell-off could be an opportunity for investors who have stayed on the sidelines," Dessai says. For an alternative spin on AI investing, consider DTCR. This ETF tracks the Solactive Data Center REITs & Digital Infrastructure Index, which focuses on the real estate investment trusts (REITs) and technology companies delivering the physical backbone of the AI ecosystem.
The best way to think about DTCR is as a "new age" real estate fund. Instead of the usual office, residential and retail real estate stocks, DTCR focuses on data centers like Equinix Inc. (EQIX) and Digital Realty Trust Inc. (DLR), along with cell tower owners like American Tower Corp. (AMT) that are heavily involved with 5G. The ETF charges a 0.5% expense ratio and has a total of 26 holdings.
Re: Best AI ETFs to Buy for 2025
Invesco AI and Next Gen Software ETF (IGPT)
"We believe the AI trend will broaden in scope to encompass additional segments of the market, with new technological advancements, a more stable interest rate environment and the ongoing impact of fiscal stimulus broadening innovation across multiple industries," says Rene Reyna, head of thematic and specialty product ETF strategy at Invesco. For AI exposure, Invesco offers IGPT at a 0.58% expense ratio.
"IGPT's index targets about 100 companies from across the globe that generate revenue from various forms of software and AI, such as data storage, robotics, autonomous vehicles, semiconductors and web platforms," Reyna says. The top holdings include Meta Platforms, Alphabet, Nvidia, Intuitive Surgical, Adobe Inc. (ADBE), Advanced Micro Devices Inc. (AMD) and Qualcomm Inc. (QCOM).
"We believe the AI trend will broaden in scope to encompass additional segments of the market, with new technological advancements, a more stable interest rate environment and the ongoing impact of fiscal stimulus broadening innovation across multiple industries," says Rene Reyna, head of thematic and specialty product ETF strategy at Invesco. For AI exposure, Invesco offers IGPT at a 0.58% expense ratio.
"IGPT's index targets about 100 companies from across the globe that generate revenue from various forms of software and AI, such as data storage, robotics, autonomous vehicles, semiconductors and web platforms," Reyna says. The top holdings include Meta Platforms, Alphabet, Nvidia, Intuitive Surgical, Adobe Inc. (ADBE), Advanced Micro Devices Inc. (AMD) and Qualcomm Inc. (QCOM).
Re: Best AI ETFs to Buy for 2025
Roundhill Generative AI & Technology ETF (CHAT)
All of the previous ETFs passively tracked a benchmark index. If you want active management when it comes to AI ETFs, consider CHAT. This ETF explicitly focuses on companies with high involvement in generative AI like DeepSeek, OpenAI's ChatGPT and Anthropic's Claude. It charges a 0.75% expense ratio and has a fairly concentrated, high-conviction portfolio of around 50 holdings.
"CHAT selects stocks using a proprietary methodology that combines a transcript score and sector score to evaluate companies' relevance to generative AI, factoring in their revenue, profit and R&D investment in AI technologies," explains Dave Mazza, CEO at Roundhill Investments. "Companies are then scored and selected based on their exposure to AI, market capitalization and liquidity."
All of the previous ETFs passively tracked a benchmark index. If you want active management when it comes to AI ETFs, consider CHAT. This ETF explicitly focuses on companies with high involvement in generative AI like DeepSeek, OpenAI's ChatGPT and Anthropic's Claude. It charges a 0.75% expense ratio and has a fairly concentrated, high-conviction portfolio of around 50 holdings.
"CHAT selects stocks using a proprietary methodology that combines a transcript score and sector score to evaluate companies' relevance to generative AI, factoring in their revenue, profit and R&D investment in AI technologies," explains Dave Mazza, CEO at Roundhill Investments. "Companies are then scored and selected based on their exposure to AI, market capitalization and liquidity."