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Yahoo
27 minutes ago
- Yahoo
Investing in Artificial Intelligence (AI) Stocks Can Be Risky, but This Might Be a Great Way to Do It
Key Points Volatility is the price we pay for the opportunity to earn higher returns in the stock market compared to risk-free assets like cash. Artificial intelligence (AI) stocks have generally delivered spectacular returns over the last couple of years, but it isn't always smooth sailing. The iShares Future AI and Technology ETF holds 48 different AI stocks, and it might be a great option for investors seeking exposure to the sector. 10 stocks we like better than iShares Future AI & Tech ETF › Investors can earn a reliable, practically risk-free annual return of up to 5% by purchasing U.S. government bonds, or they can invest in the S&P 500 (SNPINDEX: ^GSPC) index, which has delivered a compound annual return of 10.5% since its inception in 1957. But volatility is the price we pay for higher returns in the stock market, so investors will have to stomach regular sell-offs along the way, which sometimes exceed 20%. Those risks are substantially higher when investing in hyper-growth areas like artificial intelligence (AI). AI software powerhouse Palantir Technologies (NASDAQ: PLTR) offers a great example -- its stock has surged by a whopping 480% over the past 12 months, but it suffered a nerve-racking plunge of 40% between February and April this year, which would have spooked even the most seasoned investors. Buying an exchange-traded fund (ETF) can be a great way to invest in a basket of high-growth AI stocks, while smoothing out some of that extreme volatility. The iShares Future AI and Technology ETF (NYSEMKT: ARTY) holds 48 different AI stocks, including many of the industry's leaders, so it can insulate investors from sharp losses if one or two names underperform. Read on to learn more. Palantir, Nvidia, and Alphabet are just some of the AI leaders in this ETF The iShares Future AI and Technology ETF focuses on the entire AI value chain, investing in companies all over the world that develop the infrastructure, software, and services powering this tech boom. The below table displays 10 of the most notable AI names in the ETF's 48-stock portfolio, ordered by their weightings: Stock iShares ETF Portfolio Weighting Advanced Micro Devices (NASDAQ: AMD) 5.66% Nvidia (NASDAQ: NVDA) 5.04% Broadcom (NASDAQ: AVGO) 4.82% Palantir Technologies 3.29% Alphabet Class A (NASDAQ: GOOGL) 3.01% Microsoft (NASDAQ: MSFT) 3.00% Amazon (NASDAQ: AMZN) 2.94% Snowflake (NYSE: SNOW) 2.85% Meta Platforms (NASDAQ: META) 2.51% Oracle (NYSE: ORCL) 0.64% Data source: iShares. Portfolio weightings are accurate as of July 25, 2025, and are subject to change. The AI revolution really gathered momentum at the start of 2023, when OpenAI's ChatGPT application surged in popularity by giving people a glimpse into this technology's potential. Since then, the above stocks have delivered a blistering average return of 522%, and a median return of 185%, so investors who haven't owned a slice of the AI boom have almost certainly underperformed the broader market: AMD, Nvidia, and Broadcom are three top suppliers of the data center chips, networking equipment, and components required to develop AI. Nvidia is the clear leader of that pack because the performance of its graphics processing units (GPUs) is unmatched, and demand for those chips continues to exceed supply. In fact, Nvidia has become the world's largest company on the back of the AI revolution, with its market capitalization recently topping $4.3 trillion. Alphabet, Microsoft, and Amazon are some of the biggest buyers of the data center hardware I just highlighted. They each operate cloud platforms where they sell state-of-the-art computing capacity to AI developers, in addition to ready-made large language models (LLMs), which are the core ingredients for creating AI software. Then there is Palantir, which is a true AI software giant. Its AIP (Artificial Intelligence Platform) platform helps businesses and governments deploy AI into their operations, whereas its Gotham and Foundry platforms help them extract valuable insights from their data. The more than 20-fold increase in Palantir stock since the start of 2023 has catapulted it to a very high -- and potentially unsustainable -- valuation, but that hasn't stopped one Wall Street analyst from predicting more upside. A great addition to a diversified portfolio The performance of the iShares Future AI and Technology ETF is completely dependent on the success of AI and AI-adjacent technologies, so investors shouldn't put all of their eggs in one basket even though it's less risky than buying one or two AI stocks. Instead, they should buy it as part of a diversified portfolio of other funds or individual stocks. Moreover, the ETF was established in 2018 with a broad focus on robotics and AI, but it was completely reconstructed on Aug. 12 last year to focus on AI specifically. Therefore, it doesn't have much of a track record for investors to analyze, but it has delivered a massive return of 40% since the changes were made. That's more than double the 19.5% return produced by the S&P 500 over the same period. That strong performance does come at a cost, because the iShares ETF has an expense ratio of 0.47%. It means a $10,000 investment will incur an annual fee of $47, which doesn't sound high at face value, but a traditional index fund issued by a company like Vanguard typically comes with an expense ratio of just 0.03%. This cost won't matter much if the iShares ETF continues to deliver blistering returns, but it's something to consider. One thing is for sure: The iShares ETF currently holds every AI stock an investor could want, so it will make a great addition to a diversified portfolio, especially one that doesn't already have exposure to this revolutionary sector of the market. Should you buy stock in iShares Future AI & Tech ETF right now? Before you buy stock in iShares Future AI & Tech ETF, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and iShares Future AI & Tech ETF wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $630,291!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,075,791!* Now, it's worth noting Stock Advisor's total average return is 1,039% — a market-crushing outperformance compared to 182% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 29, 2025 Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Meta Platforms, Microsoft, Nvidia, Oracle, Palantir Technologies, and Snowflake. The Motley Fool recommends Broadcom and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy. Investing in Artificial Intelligence (AI) Stocks Can Be Risky, but This Might Be a Great Way to Do It was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Forbes
3 hours ago
- Forbes
Q2 Gold Demand Rose On Strong ETF Inflows, Says World Gold Council
Global gold demand rose further in quarter two thanks to 'hefty' demand in the exchange-traded fund (ETF) market. That's according to data from the World Gold Council (WGC). Including over-the-counter (OTC) investment, total bullion demand rose 3% year on year between April and June, to 1,249 tonnes. In value terms, demand soared 45% to $132 billion, thanks to fresh gold price strength. The precious metal printed a new quarterly record of $3,280.35 per ounce, the WGC said. This was up 40% year on year and 15% from quarter one. Gold prices struck new all-time highs just above $3,500 per ounce in late April. Gold ETFs Lead Investment Flows Robust ETF inflows, combined with strong bar and coin demand, drove total gold investment demand 78% higher year on year, the WGC said. This totalled a whopping 477 tonnes. The Council said that 'the themes that created such fertile ground for gold investment in Q1 remained very much in play during the second quarter.' These included 'fluctuating US trade policy; a weaker US dollar; heightened geopolitical tensions punctuated by regional flare-ups; close attention to the respective paths of inflation and economic growth; and fresh record highs in the gold price that attracted further investment inflows,' it added. Gold-backed ETFs saw a 170-tonne increase in quarterly holdings, as strong demand in April and June offset May's monthly decline. As a result, total holdings rose 397 tonnes over the course of the first half. This represented the strongest semi-annual performance since the first half of 2020, when funds printed a record 734-tonne increase. North American ETFs added 73 tonnes of the yellow metal, taking total holdings to 1,857 tonnes (and assets under management (AUMs) to $196 billion). Asian inflows were slightly behind at 70 tonnes. The WGC described buying activity as 'all the more impressive considering their collective holdings are less than one-fifth the size at 321 tonnes ($35 billion).' European funds added 24 tonnes, taking physical holdings to 1,367 tonnes and AUMs to $144 billion. Mixed Demand Elsewhere Elsewhere, second-quarter gold bar and coin demand was up 11% year on year, at 307 tonnes. This was down 6% from the 'very strong' 325 tonnes punched in the prior quarter, the WGC said. However, it added that quarter two's investment was 'comfortably above the 290-tonne five-year quarterly average.' Solid second-quarter demand also meant first-half bar and coin investment reached levels not seen since 2013. Central banks bought 167 tonnes of the precious metal, though this was down 21% year on year and 33% on a quarterly basis. The WGC said that 'this represents the lowest level of quarterly demand since quarter two of 2022.' But it added that 'demand remains 41% above the average quarterly level that was typical between 2010 and 2021.' Gold jewellery demand totalled 341 tonnes, down 14% year on year. The Council said that 'volumes continued to decline… as record gold prices during the quarter further impinged on affordability.' Jewellery demand fell to levels not seen since the third quarter of 2020. Technological demand for gold slipped 2% year on year to 78.6 tonnes, as tariff-related uncertainty impacted the electronics industry. On the supply side, levels rose 3% year on year in the second quarter, to 1,249 tonnes. Mine production edged 1% higher, to 909 tonnes. Recycled gold volumes increased 4% to 347 tonnes.
Yahoo
4 hours ago
- Yahoo
SEC Approves In-Kind Redemptions for All Spot Bitcoin and Ethereum ETFs
The U.S. Securities and Exchange Commission (SEC) has approved the use of in-kind creation and redemption processes for all spot bitcoin (BTC) and ethereum (ETH) exchange-traded funds (ETFs), marking a significant shift in the regulator's approach to digital assets under its new decision allows authorized participants—large institutional investors who facilitate ETF liquidity—to create and redeem ETF shares directly in BTC or ETH, rather than having to use cash. The mechanism is widely seen as more efficient and secure as it lets authorized participants to closely track investor demand and adjust ETF share supply in real time, without the need to convert assets back and forth into fiat currency. Invest in Gold American Hartford Gold: #1 Precious Metals Dealer in the Nation Priority Gold: Up to $15k in Free Silver + Zero Account Fees on Qualifying Purchase Thor Metals Group: Best Overall Gold IRA This marks the SEC's first major crypto-friendly policy move since Paul Atkins was named chair of the agency earlier this year. Atkins, a former SEC commissioner known for his market-friendly views, has long advocated for a more open regulatory approach toward digital assets. "'It's a new day at the SEC," said Atkins in a press release. "A key priority of my chairmanship is developing a fit-for-purpose regulatory framework for crypto asset markets,' he continued. "I am pleased the Commission approved these orders permitting in-kind creations and redemptions for a host of crypto asset ETPs. Investors will benefit from these approvals, as they will make these products less costly and more efficient."The shift comes after BlackRock filed a request in January to allow in-kind transactions for its iShares Bitcoin Trust (IBIT), and other issuers, including Fidelity and Ark Invest, quickly now, all approved spot bitcoin ETFs—first greenlit by the SEC in January 2024 —were only allowed to operate with cash creations and redemptions. That requirement added operational complexity and was widely viewed as a barrier to efficiency for institutional market SEC also approved an increase in position limits for options trading on IBIT, a move that will allow traders to hold larger options positions tied to the limits are regulatory caps that restrict the number of options contracts a trader or institution can control in a single security to prevent market manipulation or excessive risk. By raising these limits, the SEC is signaling greater comfort with the liquidity and maturity of the Bitcoin ETF market, and giving institutional investors more flexibility to hedge or express views on the fund's performance. The changes could significantly increase institutional participation in both ETF groups by reducing friction for arbitrage and hedging strategies. The SEC's decision underscores a growing willingness under Atkins' leadership to treat crypto assets within the same regulatory frameworks applied to traditional markets.擷取數據時發生錯誤 登入存取你的投資組合 擷取數據時發生錯誤 擷取數據時發生錯誤 擷取數據時發生錯誤 擷取數據時發生錯誤
