Could This AI ETF Soar 300% And Become The Next Nvidia?

Asking any fund to behave like a stock fund, let alone one with an epic story like Nvidia (NASDAQ: NVDA)is quite a task. After all, exchange traded funds (ETFs) They’re baskets of stocks, so even if those products include shares of a darling like Nvidia, the returns are driven by the entire selection, not a single name.

It’s a trade-off. Investors sacrifice some of an individual stock’s upside potential for the diversification benefits and elimination of the stock selection burdens associated with ETFs and index funds. That doesn’t mean the ETF landscape is under-resourced multibagger potential – not when there are so many dedicated technology and artificial intelligence (AI) ETFs on the market.

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Take the case of the Invesco AI and Next Gen Software ETF (NYSEMKT: IGPT). This ETF, which considers Nvidia the second-largest holding, may not be “the next Nvidia.” Yet it has the ingredients needed to deliver significant long-term profits, perhaps even triple digits. Below I will examine the bull case for this AI ETF.

This Invesco ETF has a value of $652 million assets under management (AUM) and turned 20 years old in June, so it’s neither small nor young. Interestingly, this fund was designed as a software-focused ETF, but amid the AI tidal wave, the issuer changed its name and index in June 2023 to better reflect its AI-focused positioning.

Between 2024 and 2025, Nvidia outperformed the AI ETF by a margin of more than 5 to 1; however, it is to the fund’s credit that it slightly outperformed the Nasdaq-100 during that time frame. Keep in mind that the goal of an ETF is not to outperform its best-performing components. Instead, it should offer a combination of diversification and upside potential. This Invesco ETF, which charges an annual fee of 0.56%, holds 100 stocks across 17 sectors.

Today, this tech ETF allocates more than 43% of its portfolio to semiconductor stocks, while also offering significant exposure to AI hyperscalers. It also retains some of its software roots, which is important because some experts think there are specific software names among them the best AI ideas for long-term investors.

A good example of the intersection between AI and software is Adobea top 10 position in this ETF. The company behind Illustrator and Photoshop is known to many tech investors and also develops AI-related products. When Adobe announced its fourth-quarter financial results in December, CEO Shantanu Narayen highlighted the company’s “growing importance in the global AI ecosystem and the rapid adoption of our AI-powered tools.”

Another company at the intersection of AI and software that could bring significant gains to this tech ETF is Snowflake. A striking technical name with the potential To beat the more popular stocks in 2026, Snowflake uses AI tools to retain current customers and attract new ones.

The AI-powered Cortex platform allows customers to build apps using the data they already pay Snowflake to store and protect. This confirms that the company has multiple opportunities to expand relationships with existing customers while acquiring new customers.

There are times when investors can benefit from a reality check, and that’s not necessarily a bad thing. Here’s the thing about this AI ETF: It probably won’t generate Nvidia-like returns. Few assets will ever do that, but that doesn’t put a damper on this fund as it has the potential to deliver performance that will satisfy even the most demanding investors.

The wind of growth is here. Goldman Sachs estimates that the market for AI-powered customer service software could grow 20% to 45% by 2030. The top end of the range implies growth that is more than double the forecast for the broader software industry.

Agentic AI Progress could also benefit this ETF, as the software companies can offer customers new innovations that improve workplace productivity. Additionally, software developers, including some based in this ETF, are working to address issues that hinder AI software adoption. As these steps are taken, there could be more tailwinds for this fund.

Ultimately, this AI ETF is unlikely to fit Nvidia’s long-term return profile. However, that is not so negative, because the fundamental factors are in place that allow this fund to achieve triple-digit gains over longer investment periods.

Before you buy shares in Invesco AI and Next Gen Software ETF, consider the following:

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Todd Shriber has no position in any of the stocks mentioned. The Motley Fool holds positions in and recommends Adobe, Goldman Sachs Group, Nvidia, and Snowflake. The Motley Fool recommends the following options: long January 2028 $330 calls at Adobe and short January 2028 $340 calls at Adobe. The Motley Fool has a disclosure policy.

Could This AI ETF Soar 300% and Become the Next Nvidia? was originally published by The Motley Fool