AI ETFs in 2026: A Practical Guide to Investing in Artificial Intelligence

Artificial intelligence has moved from a niche technology theme into a major investment trend. From semiconductor manufacturers and cloud providers to software companies developing generative AI applications, the AI ecosystem now spans multiple industries.

For investors who want exposure to this trend without selecting individual companies, an AI ETF can provide a diversified way to invest in a basket of companies connected to artificial intelligence.

This guide explains how AI ETFs work, what they typically hold, how to compare them, and what investors should understand before adding AI exposure to a broader portfolio.

What Is an AI ETF?

An AI ETF, or artificial intelligence exchange-traded fund, is a fund that provides exposure to companies involved in artificial intelligence and related technologies.

Rather than buying individual shares, investors purchase units of an ETF that holds a portfolio of securities according to the fund's investment strategy.

The exact definition of an AI company varies between funds. Some focus on companies developing AI technologies directly. Others include semiconductor manufacturers, cloud computing providers, robotics companies, data infrastructure businesses, and software companies that are expected to benefit from AI adoption.

This means two ETFs marketed around artificial intelligence can have substantially different portfolios.

Why Are AI ETFs Popular in 2026?

The rapid expansion of generative AI has increased investor interest in the companies supplying the hardware, computing capacity, software, and infrastructure needed to build and deploy AI systems.

AI investment also extends beyond model developers. Advanced chips, memory, networking equipment, data centres, cloud platforms, cybersecurity, enterprise software, and automation can all benefit from increasing AI adoption.

AI ETFs can provide a way to gain exposure to multiple parts of the AI ecosystem through one exchange-traded product.

How Do AI ETFs Work?

An AI ETF generally follows a defined investment methodology that determines which securities enter the portfolio and how much each holding represents.

Depending on the fund, the portfolio may be:

• Market-cap weighted
• Equal weighted
• Thematically weighted
• Based on an AI-focused index
• Actively managed

Some funds also use screening processes to identify companies with significant exposure to AI.

This methodology matters because it can have a major impact on performance and risk. For example, an ETF that concentrates heavily in semiconductor companies will behave differently from one that spreads exposure across software, robotics, cloud computing, and other technology segments.

AI ETF vs Buying Individual AI Stocks

An ETF can reduce company-specific concentration because it holds multiple securities. However, diversification does not eliminate market risk.

Individual stocks provide more targeted exposure. If a particular company significantly outperforms the broader AI sector, owning that stock directly could produce higher returns. The opposite is also true if the company underperforms.

For investors who want broad exposure to the AI theme, an ETF may be more straightforward. 

Popular Types of AI ETFs

Broad AI ETFs

Broad AI ETFs typically invest across multiple parts of the artificial intelligence ecosystem.

They may include semiconductor companies, cloud providers, software businesses, and other technology companies.

Examples include the Global X Artificial Intelligence & Technology ETF (AIQ), which holds companies across AI hardware, software, and platforms, and the iShares Future AI & Tech ETF (ARTY), which tracks a global index of companies spanning generative AI, AI infrastructure, software, and services.

These funds can be useful for investors who want diversified exposure to the overall AI theme rather than betting on one specific segment.

Semiconductor and AI Infrastructure ETFs

Some funds focus more heavily on the companies providing the hardware required for AI computing.

This can include:

• GPU manufacturers
• Semiconductor foundries
• Memory manufacturers
• Networking companies
• Semiconductor equipment providers

Well-known funds in this category include the VanEck Semiconductor ETF (SMH) and the iShares Semiconductor ETF (SOXX). These are semiconductor funds rather than AI funds in a strict sense, but they are widely used for exposure to AI infrastructure because chipmakers sit at the centre of AI computing demand.

The performance of these ETFs can be particularly sensitive to capital expenditure cycles and demand for data-centre infrastructure.

Robotics and Automation ETFs

Artificial intelligence increasingly overlaps with robotics and automation.

These ETFs may hold companies involved in industrial robotics, autonomous systems, manufacturing automation, and related technologies.

Examples include the Global X Robotics & Artificial Intelligence ETF (BOTZ), which leans toward industrial and medical robotics, and the ROBO Global Robotics and Automation Index ETF (ROBO), which spreads exposure more evenly across a larger number of holdings.

Generative AI ETFs

Some newer thematic funds focus specifically on companies expected to benefit from generative AI.

One example is the Roundhill Generative AI & Technology ETF (CHAT), which targets companies building or monetising generative AI applications and infrastructure.

Because generative AI is still developing rapidly, the composition of these funds can vary considerably.

How to Evaluate an AI ETF in 2026

The most important mistake to avoid is choosing an AI ETF based only on recent performance.

1. Check the Holdings

Start by looking at the ETF's largest holdings.

Ask:

• How many companies does the fund own?
• What percentage is concentrated in its top 10 holdings?
• Does it actually provide diversified AI exposure?
• Is the portfolio dominated by a small number of large technology companies?

2. Examine the Expense Ratio

The expense ratio represents the annual operating expenses charged by the fund.

Even relatively small differences in fees can affect long-term returns, particularly when comparing similar ETFs. However, the cheapest ETF is not automatically the best ETF.

3. Look at Assets and Liquidity

Trading liquidity matters when buying or selling ETFs. 

Investors should examine trading volume, bid-ask spreads, and assets under management rather than assuming that every thematic ETF trades equally efficiently.

This is particularly relevant for traders who actively enter and exit positions.

4. Understand the Index or Strategy

Read the fund's methodology:

• How companies qualify for inclusion
• How holdings are weighted
• How frequently the portfolio is rebalanced
• Whether derivatives are used
• Whether the fund is actively managed
• Whether the ETF focuses on a particular geography

Understanding the methodology can help explain why an ETF may behave differently from the broader AI sector.

What Are the Risks of AI ETFs?

Valuation Risk

AI-related companies can attract significant investor expectations. If future growth does not meet those expectations, stock prices can decline even when a company continues to grow.

Concentration Risk

Some AI ETFs may hold dozens of companies but still have substantial exposure to their largest positions.

Check the portfolio weights before assuming that an ETF is broadly diversified.

Technology Risk

AI is developing rapidly. Companies can lose competitive advantages as new technologies emerge.

Semiconductor Cycle Risk

AI infrastructure depends heavily on semiconductors. Changes in chip demand, inventory levels, capital spending, or supply conditions can affect AI-related companies.

Interest Rate Risk

Many technology companies are valued partly on expectations of future growth. Changes in interest rates can influence how investors value those future cash flows.

Regulatory Risk

AI regulation is evolving across major markets. New rules involving data, copyright, safety, privacy, and the deployment of AI systems could affect different companies in different ways.

Where to Trade AI ETFs

Backpack Securities allows users to trade real U.S.-listed stocks and ETFs from the same account they use for crypto, with balances settled in USD and no separate brokerage login required.

Key features include:

• Real ownership: When you buy an ETF on Backpack, you hold a real security entitlement to the underlying shares, similar to holding them at a traditional brokerage. This is direct ownership rather than a synthetic product that tracks the price.
• One account for crypto and stocks: Manage ETFs and crypto positions in a single portfolio without moving funds between platforms.
• Extended trading hours: Backpack supports trading outside regular U.S. market hours, which can be useful for investors in other time zones or those who want to respond to news when traditional markets are closed.

Availability may vary by region, and users should review the eligibility requirements before trading. As with any investment, this content is for informational purposes only and does not constitute investment advice.

Are AI ETFs Worth Considering in 2026?

The growth of artificial intelligence has created a broad investment ecosystem spanning semiconductors, cloud computing, software, robotics, data centres, and enterprise technology.

An AI ETF can provide a convenient way to access this ecosystem through a diversified portfolio, but not every AI ETF provides the same exposure. Before trading or investing, examine the fund's holdings, methodology, expense ratio, liquidity, concentration, and risk profile.