Key points
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Investors without exposure to artificial intelligence (AI) stocks have likely underperformed the broader market in recent years.
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The Roundhill Generative AI and Technology ETF is a simple way for investors to buy a complete portfolio of leading AI stocks.
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More than a fifth of its assets are invested in Alphabet, Nvidia, Micron and Amazon, but they aren’t the only AI powerhouses the company owns.
Artificial intelligence (AI) stocks have lifted the broader market in recent years. Investors who haven’t owned a piece of the AI revolution since it started gaining momentum in early 2023 have likely underperformed the benchmark. S&P500 (SNPINDEX: ^GSPC) index.
Fortunately, there is an easy way to put that right in 2026 Roundhill Generative AI and Technology ETF (NYSEMKT: CHAT) invests exclusively in companies developing AI infrastructure, AI software and AI platforms, with more than a fifth of its assets parked in Nvidia, Alphabet, Micron technologyAnd Amazon only.
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This is why this exchange-traded fund (ETF) could be a great addition to a diversified portfolio that doesn’t have exposure to the AI boom.
A smiling person writing notes while looking at stock charts on the computer.
Image source: Getty Images.
A complete AI portfolio packed into one ETF
The Roundhill Genative AI and Technology ETF owns just 43 stocks. It is actively managed by a team of investment professionals who adjust the portfolio based on what they believe will deliver the best returns.
This can lead to higher returns compared to passively managed ETFs that simply track indexes like the S&P 500, but on the other hand, volatility is a key risk because the AI industry moves so quickly.
Volatility can also be a side effect of the Roundhill ETF’s top-heavy portfolio construction. As I mentioned, the fund has 20.7% of its assets invested in just four of the top companies in the AI industry, meaning its performance is sometimes disproportionately affected by them alone:
|
Stock |
Roundhill ETF Portfolio Weighting |
|---|---|
|
Alphabet |
6.92% |
|
Nvidia |
6.43% |
|
Amazon |
4.01% |
|
Micron technology |
3.33% |
Data source: Roundhill Investments. Portfolio weights are accurate as of March 1, 2026 and are subject to change.
Fortunately, these four stocks have been strong performers since the start of 2023, with an average return of 559% over the three-year period. From one perspective, the S&P 500 rose just 79%.
NVDA graph
Data per YCharts.
There is certainly reason for even more gains in these four names. Nvidia’s new Vera Rubin semiconductor platform for the data center is expected to go into mass production later this year and is expected to significantly reduce the cost of training and operating AI models. The company’s chief financial officer, Colette Kress, says every major developer will likely deploy them.
That’s also good news for Micron, because its high-bandwidth memory solutions are embedded in Nvidia’s AI chips, where they manage the seamless flow of data to unlock maximum processing speeds. The company’s revenue growth is expected to accelerate from here onwards thanks to AI-related demand.
As chips and other hardware components become more efficient, leasing computing capacity to developers via the cloud also becomes a more profitable business model due to its much lower costs. Alphabet and Amazon operate two of the world’s largest cloud platforms, so this will be a huge boost for both companies.
Some of the other prominent AI stocks in the Roundhill ETF include Microsoft, Advanced micro devices, Broadcom, Metaplatforms, Palantir Technologiesand two of Micron’s largest global competitors, SK Hynix And Samsung electronics.
A short track record, but blistering returns so far
The Roundhill Generative AI and Technology ETF was founded in May 2023, so it doesn’t have a very long track record. The AI industry has experienced very little turbulence (broadly speaking) over that period, so we don’t know how well this ETF will weather a potential storm when it inevitably comes.
That said, the Roundhill ETF has returned 146% since its inception. erase the S&P 500, which returned 64% over the same period.
Those high returns come at a cost, because the ETF has an expense ratio of 0.75%, meaning a $10,000 investment carries an annual fee of about $75. That doesn’t sound that bad at first glance, but it is 25 times higher than the expense ratio of the Vanguard S&P 500 ETFwhich is only 0.03%. An actively managed fund is usually more expensive to manage because it requires the full attention of a team of experts, which costs money.
Given the high costs, high portfolio concentration, and potential for volatility, investors shouldn’t gamble on an ETF like this. Instead, it could be a great addition to a portfolio of other ETFs and individual stocks that don’t currently have exposure to the AI boom.
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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, Micron Technology, Microsoft, Nvidia, Palantir Technologies, and Vanguard S&P 500 ETF. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.
