AI drives digital transformation by automating tasks, optimizing data, and enhancing customer experiences across sectors like healthcare and fintech, making it a promising market with significant growth potential for businesses and investors alike.
Therefore, as technology transformations speed up, smart investors might consider watching strong AI ETFs, such as Global X Robotics & Artificial Intelligence ETF (BOTZ), ARK Autonomous Technology & Robotics ETF (ARKQ) and Robo Global Artificial Intelligence ETF (THNQ).
AI is crucial in today’s digital business landscape, offering powerful tools for task automation and enabling faster, more efficient decision-making for both enterprises and consumers. According to IDC, global AI spending, encompassing AI-enabled services, is projected to exceed $632 billion by 2028, reflecting a remarkable 29% CAGR fueled by the rapid adoption of AI and generative AI technologies.
Furthermore, according to Statista, the artificial intelligence market is projected to reach $184 billion in 2024, with a 28.46% CAGR, growing to $826.7 billion by 2030. To capitalize on this momentum, investing in AI ETFs provides exposure to the growing AI sector by including a diverse range of tech companies, thereby spreading risk and minimizing the impact of individual stock fluctuations for investors.
Given this favorable backdrop, let’s evaluate the fundamentals of the three AI ETF picks mentioned above.
Global X Robotics & Artificial Intelligence ETF (BOTZ)
BOTZ is an exchange-traded fund launched and managed by Global X Management Company LLC. The fund invests in public equity markets in developed regions globally. It targets stocks of companies involved in the development of robotics and artificial intelligence, including those working on industrial robots, automated inventory management, unmanned vehicles, voice/image/text recognition, and medical robots or robotic instruments. The fund aims to track the performance of the Indxx Global Robotics & Artificial Intelligence Thematic Index using a full replication technique.
With $2.60 billion in assets under management (AUM), BOTZ’s top holding is NVIDIA Corporation (NVDA) with a 12.28% weighting, followed by Intuitive Surgical, Inc. (ISRG), with a 9.88% weighting, and Dynatrace, Inc. (DT), with 4.69%. BOTZ has a total of 47 holdings.
BOTZ has an expense ratio of 0.68%, higher than the category average of 0.65%. It currently has a NAV of $31.62. Its fund outflows came in at $82.63 million over the past year.
The ETF pays an annual dividend of $0.05, which yields 0.15% on the current price. It has a four-year average dividend yield of 0.20%.
BOTZ has gained 31.8% over the past year and 18.1% over the past nine months to close the last trading session at $31.81.
BOTZ’s POWR Ratings reflect its promising prospects. The ETF’s overall A rating equates to a Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.
BOTZ has an A grade for Buy & Hold and Trade. In the Technology Equities ETFs group, it is ranked #13 out of 119 stocks. Click here to access all of BOTZ’s POWR Ratings.
ARK Autonomous Technology & Robotics ETF (ARKQ)
ARKQ is an exchange-traded fund launched and managed by ARK Investment Management LLC. It invests in public equity markets globally. The fund focuses on stocks in autonomous technology, robotics, and IT sectors that benefit from innovation in automation, manufacturing, transportation, energy, AI, and materials. It invests in growth and value stocks across market capitalizations, targeting socially conscious companies that promote environmental responsibility. It employs fundamental and quantitative analysis with a bottom-up and top-down stock-picking approach to create its portfolio.
With $763.60 million in assets under management (AUM), ARKQ’s top holding is Tesla, Inc. (TSLA) with a 14.40% weighting, followed by Teradyne, Inc. (TER), with a 9.81% weighting, and Kratos Defense & Security Solutions, Inc. (KTOS), with 9.11%. It has a total of 37 holdings.
It has an expense ratio of 0.75%, higher than the category average of 0.49%. It currently has a NAV of $60.62. ARKQ’s fund outflows came in at $22.90 million over the past month.
ARKQ has gained 20.2% over the past year and 14.1% over the past six months to close the last trading session at $60.94.
ARKQ’s POWR Ratings reflect this promising outlook. The ETF’s overall A rating equates to a Strong Buy in our proprietary rating system.
ARKQ has an A grade for Buy & Hold, Peer, and Trade. Of the 26 ETFs in the B-rated Mid Cap Growth ETFs group, it is ranked #9. Click here to access all of ARKQ’s POWR Ratings.
Robo Global Artificial Intelligence ETF (THNQ)
THNQ is an exchange-traded fund launched and managed by Exchange Traded Concepts, LLC. It invests in public equity markets globally. The fund targets stocks of companies in information technology, software and services, systems software, software research, and artificial intelligence sectors. It invests in both growth and value stocks across diverse market capitalizations. The fund seeks to track the performance of the ROBO Global Artificial Intelligence Index using a full replication technique.
With $134.80 million in AUM, the fund has a total of 57 holdings. THNQ’s top holding is NVDA with a 2.64% weighting, followed by Advanced Micro Devices, Inc. (AMD) with a 2.46% weighting, and Microsoft Corporation (MSFT) with 2.36%.
THNQ has an expense ratio of 0.68%, higher than the category average of 0.58%. It currently has a NAV of $45.72. Its fund inflows came in at $24.12 million over the past year.
THNQ has gained 18.2% over the past nine months and 39.7% over the past year to close the last trading session at $46.40.
THNQ’s strong outlook is reflected in its POWR Ratings. The ETF has an overall rating of A, translating to a Strong Buy in our proprietary rating system.
It has an A grade for Buy & Hold and Trade. It is ranked #36 in the Technology Equities ETFs group. To access all the POWR Ratings for THNQ, click here.
What To Do Next?
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BOTZ shares were trading at $31.91 per share on Friday afternoon, up $0.35 (+1.11%). Year-to-date, BOTZ has gained 12.12%, versus a 21.17% rise in the benchmark S&P 500 index during the same period.
About the Author: Abhishek Bhuyan
Abhishek embarked on his professional journey as a financial journalist due to his keen interest in discerning the fundamental factors that influence the future performance of financial instruments.
3 AI ETFs to Watch as Technology Transformations Speed Up StockNews.com
