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Headlines
- AI Stocks in ETF: The iShares Expanded Tech Sector ETF holds leading AI stocks like Nvidia, Microsoft, and Apple, outperforming the S&P 500.
- Stock Split: The ETF recently completed a 6-for-1 stock split, making it more affordable for smaller portfolios.
- Future Potential: If AI continues to grow as predicted, the ETF could maintain its impressive returns, potentially turning a $400 monthly contribution into $1 million.
Nvidia, Microsoft, and Apple Boost Potential of Stock-Split ETF
This technology-focused ETF, which includes some of the world's top artificial intelligence (AI) stocks, is outperforming the S&P 500.
Wall Street analysts forecast that AI will generate trillions of dollars in economic value over the next decade. This trend is already evident, with Nvidia's market capitalization soaring by $2.1 trillion since early 2023, driven by the high demand for its AI data center chips.
Historically, technological advancements such as the internet, cloud computing, and enterprise software have shown that identifying long-term leaders and laggards is challenging. Nvidia is facing increasing competition, and some of the best AI models are emerging from private startups. Therefore, a diversified approach to AI might be more effective for many. One straightforward method is through an exchange-traded fund (ETF), and the iShares Expanded Tech Sector ETF currently holds nearly all prominent technology stocks.
The iShares Expanded Tech Sector ETF recently executed a stock split
The iShares ETF has achieved a compound annual return of 20.2% over the past decade, significantly outpacing the S&P 500's 13.2% average annual gain during the same period.
In March, the ETF's price reached as high as $512 per share, making it somewhat costly for smaller portfolios. To increase accessibility, iShares conducted a 6-for-1 stock split, which multiplied the number of shares by six and proportionally reduced the price per share. Now, a share of the ETF costs just $88.93 (at the time of writing).
If AI meets Wall Street's lofty projections, this ETF could sustain its current momentum over the long term. Here's how a consistent $400 monthly contribution could potentially grow to $1 million over time.
