AI was the main focus of the stock market in 2023, with companies like Nvidia experiencing a surge in demand for data center chips designed for AI workloads. Shares of other AI companies, including Microsoft, Amazon, and Alphabet, also saw market-beating returns. However, the AI industry is experiencing volatility, and not every company will succeed.
One way for investors to limit exposure to potential failures and still invest in AI stocks is through exchange-traded funds (ETFs). The Global X Artificial Intelligence and Technology ETF (AIQ) is a strong option for new investors. It holds 86 different stocks, with high weightings for popular companies like Intel, Nvidia, and Alphabet. The ETF delivered a 55% return in 2023, more than doubling the return of the S&P 500.
On the other hand, the Global X Autonomous and Electric Vehicles ETF (DRIV) specifically focuses on the AI opportunity in electric and self-driving vehicles. Despite high volatility due to concentration in a specific industry, DRIV delivered a 24% return in 2023.
Investing $1,000 in these ETFs requires careful consideration. The Motley Fool Stock Advisor analyst team identified 10 best stocks for investors to buy now, and although these ETFs were not on the list, they could still produce significant returns. Investing in AI stocks can be risky, but ETFs are a good way to limit exposure to potential failures and still invest in AI. Both AIQ and DRIV hold a variety of stocks, with a strong focus on popular and fast-growing AI companies, making them a good choice for long-term investment in the AI industry.