2 Artificial Intelligence ETFs to Confidently Buy Heading Into 2026 | The Motley Fool

With 2025 rapidly drawing to a close, this might be a good time for investors to make adjustments to their portfolios in preparation for the new year. The artificial intelligence (AI) industry has been a major source of stock market returns this year, and anyone who hasn't owned a slice of key players like Nvidia and Palantir Technologies probably underperformed the benchmark S&P 500 . But there's a simple solution for those investors as we head into 2026. Two exchange-traded funds (ETFs) that invest exclusively in the booming AI sector are the Roundhill Generative AI and Technology ETF ( CHAT +1.20%) and the iShares Future AI and Tech ETF ( ARTY +1.09%). They take the guesswork out of picking winners and losers, so here's why they could be great additions to any diversified portfolio for the new year. Image source: Getty Images. The case for the Roundhill Generative AI and Technology ETF The Roundhill ETF invests exclusively in companies developing the infrastructure, platforms, and software behind the AI revolution . The fund is actively managed, meaning Roundhill's team regularly adjusts its portfolio to produce the best returns. The ETF currently holds just 49 stocks, and its top five positions alone account for 26.7% of the value of its entire portfolio. Although such a high degree of concentration can lead to volatility, those five stocks are among the leaders in the AI race: Stock Roundhill ETF Portfolio Weighting 1. 7.53% 2. Nvidia 6.11% 3. 5.13% 4. 4.28% 5. Palantir Technologies 3.67% Data source: Roundhill. Portfolio weightings are accurate as of Dec. 21, 2025, and are subject to change. Those five stocks have delivered an average return of 56% in 2025, so they helped propel the Roundhill ETF to a year-to-date gain of 47%. For some perspective, the S&P 500 is up just 17%: Alphabet is coming off two straight quarters of accelerating revenue growth in its Google Search business, almost entirely thanks to new AI-powered features like AI Overviews. Revenue growth in its Google Cloud segment is also accelerating, as the platform works to fill a staggering $155 billion order backlog from customers waiting for more of its AI data centers to come on line. Many of those data centers are powered by Nvidia's chips, which are the gold standard for developing AI models. But Alphabet isn't the only company lining up to buy them -- Microsoft and Meta Platforms are also two of the chipmaker's top customers. Meta uses them to advance its open-source Llama AI models; Microsoft uses them to deploy its Copilot AI assistant, and it also sells computing capacity to businesses through its Azure cloud platform. NYSEMKT: CHAT Key Data Points Actively managed funds typically come with high costs. The Roundhill ETF has an expense ratio of 0.75%, whereas many of the passive index funds issued by Vanguard, for example, offer expense ratios as low as 0.03%. Fortunately, investors have been well compensated for those costs so far thanks to the Roundhill ETF's blistering returns since its...

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