1 Artificial Intelligence (AI) ETF to Buy With $1,000 and Hold Forever

In This Article:

Key Points

  • The Invesco QQQ ETF has outperformed the S&P 500 through the internet age, and it could happen again with AI.

  • Investors get a healthy dose of today's technology leaders, and the ETF will rebalance and reconstitute to change with the times.

  • If investors can stomach some volatility, the Invesco QQQ ETF might be the best AI investment for $1,000 or less.

  • 10 stocks we like better than Invesco QQQ Trust ›

The internet changed the world, starting back in the 1990s. Yet nobody back then could predict all the new products, services, and industries that exist today thanks to internet technology. I think a similar phenomenon will play out with artificial intelligence (AI) over the coming decades.

In other words, hot products like ChatGPT only scratch the surface of how AI will eventually impact the world.

How do you invest for the unknown? Consider casting a wide net. An exchange-traded fund (ETF) can help, giving investors exposure to many individual companies with just one ticker symbol. For AI, it doesn't get any better than the Invesco QQQ ETF (NASDAQ: QQQ).

Here is why it's the best AI ETF you can buy with $1,000 and hold forever.

Artificial intelligence (AI) brain wave graphic.
Image source: Getty Images.

Simple, diversified AI exposure from the get-go

The Invesco QQQ is very straightforward. It tracks the Nasdaq-100 index, the top 100 companies in the broader, technology-leaning Nasdaq Composite index.

The ETF is heavy on today's technology leaders, including the "Magnificent Seven" stocks, a group of diversified megacap technology stocks. In all, the Invesco QQQ's top 10 positions include:

Company

Allocation (percentage of the Invesco QQQ)

Microsoft

8.57%

Nvidia

8.37%

Apple

8.08%

Amazon

5.53%

Broadcom

4.59%

Meta Platforms

3.59%

Tesla

3.17%

Netflix

3.15%

Costco Wholesale

2.81%

Alphabet (class A shares)

2.43%

Data source: Invesco QQQ ETF prospectus data.

These stocks comprise roughly half of the ETF, while an additional 91 companies make up the other half.

Want to invest in the companies powering AI? Leading AI chip companies like Nvidia and Broadcom are right there. AI is driving cloud growth, so what about them? Microsoft, Amazon, and Alphabet are the world's leading cloud service providers.

You'll also get industry leaders that can leverage AI to create value in their respective businesses. Netflix and Meta Platforms use AI to match you to the ideal content or advertisement. Tesla plans to build its business on autonomous driving technology and humanoid robotics. The list goes on.

It will evolve as the world does

The Nasdaq-100 and the Invesco QQQ aren't static; they rebalance quarterly and reconstitute annually.