The Best AI ETF to Invest $1,000 In Right Now

Key Points

• This popular ETF has heavy exposure to some of artificial intelligence (AI)’s biggest beneficiaries.

• It's hard to argue with the more than fivefold total return in the past decade.

• Gaining broad diversification to the AI revolution gives investors peace of mind.

• 10 stocks we like better than Invesco QQQ Trust ›

You've become familiar with the artificial intelligence (AI) boom by now. Companies are investing huge amounts of capital to build out the infrastructure to power AI models. Users continue to navigate to chatbots for information. And investors want to find ways to make money from this trend.

One option is to choose individual stocks. However, this is time-consuming, and it may require skills that you simply don't possess.

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Another, easier path is to find an exchange-traded fund (ETF) to put some money in. This passive approach can provide diversified exposure to the most powerful secular theme in recent years.

Here's the best AI ETF to invest $1,000 in right now.

Image source: Getty Images.

Know what you own

The Invesco QQQ Trust (NASDAQ: QQQ) is a wonderful choice for investors who want to bet on AI. This ETF tracks the performance of the Nasdaq-100, which contains the 100 biggest nonfinancial companies that trade on the Nasdaq exchange. It's a more concentrated index than the S&P 500 (SNPINDEX: ^GSPC).

It's critical for investors to understand what exactly they'd be owning if they add the Invesco QQQ Trust to their portfolios. To be clear, this ETF provides a lot of exposure to the AI trend. A quick look at the top positions will prove this point.

The largest holding is Nvidia, which commands 10.2% of the ETF. There has been no greater beneficiary of all the AI spending happening than this business, which provides the graphics-processing units that power AI model training. Nvidia shares are up a whopping 1,490% in the past five years (as of Aug. 5).

Additionally, Microsoft, Amazon, and Alphabet combined make up 19.5% of the Invesco QQQ Trust. These three businesses operate the largest cloud computing platforms in the world. They're helping build out the infrastructure layer for other companies to develop their own AI applications.

Besides AI, the Invesco QQQ Trust gives investors exposure to other secular trends shaping our economy. Tech-driven themes like e-commerce, digital payments, digital advertising, and streaming entertainment will also have an impact on this ETF's performance as we look ahead.

Stellar performance at a cheap price

In the past 10 years, the Invesco QQQ Trust has generated a total return of 447%. On an annualized basis, this translates to a superb 18.5% gain. A $1,000 investment in August 2015 would be worth $5,470 today. This performance is well ahead of what investors would have achieved had they bought an ETF that tracks the S&P 500, which had a total return of 261% in the last 10 years.

It's important to compare the Invesco QQQ Trust to a well-known ETF product that has grown in popularity in the past several years. The Ark Innovation ETF, run by famed investor Cathie Wood, focuses on "disruptive innovation." Like the Invesco QQQ Trust, it emphasizes betting on big tech trends.

But in the last 10 years, it has significantly underperformed the QQQ. And even worse, its expense ratio of 0.75% is nearly four times that of the Invesco QQQ Trust's 0.20%. This is very difficult to overlook, and it speaks to the allure of putting money to work in a passive investment vehicle.

While the past decade's return has been spectacular, it's impossible to know what the future will hold. However, it's a smart idea to consider investing $1,000 in the QQQ today. As the AI revolution plays out, investors will have peace of mind knowing that they own the companies that have been, and will continue to be, direct beneficiaries of this game-changing technology.

Should you invest $1,000 in Invesco QQQ Trust right now?

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Neil Patel has positions in Invesco QQQ Trust. The Motley Fool has positions in and recommends Alphabet, Amazon, Microsoft, and Nvidia. The Motley Fool 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.