1 No-Brainer Artificial Intelligence (AI) ETF to Buy With $50 During the New Nasdaq Bull Market

Key Points

• The Nasdaq-100 index plunged into bear market territory in April, but it has since recovered its losses and entered a new bull phase.

• Artificial intelligence (AI) stocks like Nvidia continue to lead the Nasdaq higher.

• The Roundhill Generative AI and Technology ETF offers investors a simple way to buy a slice of the world's best AI stocks for under $50.

• 10 stocks we like better than Tidal Trust II - Roundhill Generative Ai & Technology ETF ›

The tech-heavy Nasdaq-100 index slipped into a bear market in April after President Donald Trump announced his "Liberation Day" tariffs. But most of America's top trading partners are now at the negotiating table, giving investors confidence that a global trade war can be averted. As a result, the Nasdaq-100 recovered its losses and is now trading at a record high, so a new bull market is officially underway.

America's largest technology companies are driving the artificial intelligence (AI) revolution, and many of them -- including powerhouses like Nvidia -- have led the Nasdaq-100 into its latest bull phase. In fact, investors who haven't owned a slice of the AI industry over the last couple of years have probably underperformed the broader market.

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But there's a simple way to address that. The Roundhill Generative AI and Technology ETF (NYSEMKT: CHAT) is an exchange-traded fund (ETF) that holds a concentrated portfolio of AI stocks, so it could be a great buy for investors who lack exposure to this fast-moving technology. Here's the best part: Shares trade for under $50 each, so it's accessible for investors of all experience levels.

Image source: Getty Images.

Top holdings in Nvidia, Palantir, Oracle, and more

Unlike some ETFs that hold hundreds or even thousands of different stocks, this Roundhill ETF holds just 40. It exclusively invests in companies that develop the platforms, infrastructure, and software at the heart of the AI revolution, so it offers practically no diversification.

In fact, the top five holdings in the ETF alone represent 24.9% of the entire value of its portfolio, which further highlights its significant concentration.

Data source: Roundhill Investments. Portfolio weightings are accurate as of July 11, 2025, and are subject to change.

Nvidia is the one AI stock practically every investor wants to own. Its chips and networking equipment for data centers are critical for AI development, and demand for that hardware continues to outstrip supply. Sales have been so strong that Nvidia stock has soared more than tenfold since the beginning of 2023 alone, and it's now the world's only $4 trillion company.

Alphabet is one of Nvidia's biggest customers, having used its chips to develop its own large language models (LLMs) and AI software applications. It also operates large, centralized data centers and rents the computing capacity to developers for profit. Oracle is another major player in that space, and its data centers are among the most advanced and most cost-efficient in the entire industry, which is why leading start-ups like OpenAI and Elon Musk's xAI are lining up to use them.

Then there's Palantir. Its stock is up by more than 400% over the past year alone, thanks to soaring demand for its AI software. Its Gotham, Foundry, and AIP platforms help governments and private enterprises analyze high volumes of data to extract actionable insights, which they can use to make better operational decisions.

Outside its top five holdings, some of the other popular AI stocks in the Roundhill ETF include:

• Meta Platforms, which is the world's largest social media company. It's using AI to keep users engaged, to power new features, and to help advertisers create better content.
• Advanced Micro Devices, which has become a competitor to Nvidia in the market for AI data center chips. It's also a leading supplier of AI chips for personal computers, which could be a major growth segment in the future.
• Salesforce, which operates one of the world's largest customer relationship management platforms. Its new Agentforce layer allows businesses to create custom AI agents to serve customers and automate operational tasks, making human employees more efficient.

The Roundhill ETF can help investors beat the market

There are a couple of downsides to this ETF. First, it's quite costly to own because its expense ratio is 0.75%, which can detract from investors' returns over the long run. It's an actively managed fund, which means a team of experts is constantly adjusting the portfolio to deliver the best results, and that comes with higher costs.

For some perspective, many passive index funds issued by Vanguard have expense ratios of just 0.03%, meaning an investment of $10,000 in one of those funds would incur an annual fee of just $3, compared to $75 for the Roundhill ETF.

Second, the ETF was only established in mid-2023 so it doesn't have a very long track record for investors to analyze. With that said, it delivered a return of almost 90% since its inception, which is far better than the 65% gain in the Nasdaq-100 over the same period. The strong return also makes the high expense ratio a little easier to stomach, because it's comfortably offsetting the costs.

As I mentioned earlier, the Roundhill ETF lacks diversification, so investors shouldn't put all of their eggs in one basket. However, it could supercharge an existing portfolio of other ETFs or individual stocks that doesn't already have exposure to the AI industry.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Arista Networks, Meta Platforms, Nvidia, Oracle, Palantir Technologies, and Salesforce. The Motley Fool has a disclosure policy.