The Roundhill Generative AI and Technology ETF has destroyed the broader market since its inception.
The Nasdaq-100 The index is packed with some of America’s biggest technology companies, including those leading the artificial intelligence (AI) revolution. Earlier this year it took a brief trip into bear territory following President Trump’s announcement of “Liberation Day” tariffs, but has since risen as much as 50% from its April low, setting a new record and sparking a new bull market.
Investors who haven’t owned AI stocks in recent months have likely missed out on some of the biggest gains this new bull market has delivered yet. Going back even further, AI stocks have fueled a significant portion of the gains in the Nasdaq-100 since this technology began gaining momentum in early 2023.
Fortunately, it’s probably not too late for investors to take advantage of this opportunity. The Roundhill Generative AI and Technology ETF (CHAT 3.45%) is an exchange-traded fund (ETF) that invests exclusively in the companies driving the AI boom. One share costs less than $70, which is why it can be a great addition to any diversified portfolio.
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A concentrated portfolio of the world’s best AI stocks
ETFs can hold hundreds or even thousands of individual stocks, but the Roundhill Generative AI and Technology ETF owns just 45. The ETF specifically focuses on companies developing the infrastructure, platforms and software powering the AI boom, and is quite top-heavy, with the top five holdings representing 25.1% of the portfolio’s total value.
- Nvidia (NVDA 3.62%) provides advanced graphics processing units (GPUs) for data centers. The latest Blackwell Ultra variants are the most sought-after chips in the world for developing AI models, thanks to their industry-leading processing power and energy efficiency.
- Alphabet (GOOG 2.89%)(GOOGL 2.84%) owns Google Search, the largest Internet search engine in the world. However, it also developed the Gemini family of large language models (LLMs), which tens of thousands of organizations have put at the heart of their AI software.
- SK Hynix is one of the world’s largest suppliers of memory and storage chips for data centers, smartphones and computers. The high-bandwidth memory solutions for the data center unlock maximum processing speeds from GPUs, making them critical for AI workloads.
- Microsoft (MSFT 1.63%) woven its Copilot AI Assistant into most of its flagship software products, including Windows, Bing and 365 (Word, Excel and PowerPoint). The Azure cloud platform is also a top destination for developers looking for state-of-the-art data center capacity to build AI software.
- Broadcom (AVGO 4.42%) provides industry-leading data center networking equipment, including the Tomahawk switches that control how fast data travels between chips and devices. The company’s AI accelerators have also become a popular alternative to traditional GPUs, due to their customizable nature.
Outside of the top five holdings, the Roundhill ETF has a number of other AI leaders, including Advanced micro devices, Oracle, Amazon, MetaplatformsAnd Palantir Technologies.
Tidal Trust II – Roundhill Generative AI & Technology ETF
Today’s change
(-3.45%)$-2.16
Current price
$60.54
Key data points
Market capitalization
$0 billion
Day range
$60.08 -$62:30
Range of 52 weeks
$28.96 -$68.12
Volume
115
Avg. full
0
Gross margin
0.00%
Dividend yield
N/A
The Roundhill ETF has delivered blockbuster returns since its inception
The Roundhill Generative AI and Technology ETF was founded in May 2023, so it doesn’t have a very long track record of performance for investors to analyze. Since then, however, it has risen an eye-popping 150%, beating the Nasdaq-100, which has returned 91%, as well as the S&P500 (^GSPC 1.66%) That is an increase of 66% in the same period.
That performance comes at a cost, because the ETF has an expense ratio of 0.75%, meaning a $10,000 investment would have an annual fee of $75. Traditional passive index funds tend to be significantly cheaper; for example, those issued by Vanguard have an expense ratio of just 0.03%.
But the Roundhill ETF is actively managed, meaning a team of professionals regularly buys and sells stocks based on what they think will yield the best results, and that expertise costs money.
Despite the Roundhill ETF’s strong returns, investors shouldn’t put all their eggs in one basket. Because the fund is so heavily focused on the success of AI, any cracks in this emerging sector could lead to major losses. Instead, investors should aim to own it as part of a diversified portfolio of other ETFs and individual stocks, especially one that already has low exposure to AI and the technology sector.
Anthony Di Pizio has no positions in the stocks mentioned. The Motley Fool holds positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Meta Platforms, Microsoft, Nvidia, Oracle, and Palantir Technologies. The Motley Fool recommends Broadcom and recommends the following options: long January 2026 $395 calls to Microsoft and short January 2026 $405 calls to Microsoft. The Motley Fool has a disclosure policy.
