Will These 2 Robotics ETFs Surge 50% or More as the AI Revolution Takes Off?

Much of the stock market's attention is focused on artificial intelligence, or AI, and for good reason. AI could be the most important technological revolution of our lifetimes, and the surge in AI investment has already made many investors a lot of money.

However, there are some great AI-adjacent opportunities to look at -- that is, industries that stand to benefit tremendously from the AI revolution -- and one in particular that could be a home-run investment opportunity is robotics.

Of course, choosing individual robotics stocks isn't the best move for everyone, so here are two excellent ways to get exposure through exchange-traded funds, or ETFs.

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A robotics index fund with lots of upside potential

The Global X Robotics and Artificial Intelligence ETF (NASDAQ: BOTZ) is one of the larger robotics ETFs with over $3 billion in assets. It tracks an index of 53 stocks that are either directly related to robotics, or that provide critical parts or infrastructure for the industry. For example, Nvidia (NASDAQ: NVDA) is the fund's top holding, and its AI chips are highly utilized for robotics applications.

Other top holdings include surgical robotics leader Intuitive Surgical (NASDAQ: ISRG), unmanned aerial vehicle manufacturer AeroVironment (NASDAQ: AVAV), and software intelligence platform developer Dynatrace (NYSE: DT), just to name a few.

Unlike many other robotics ETFs, the Global X Robotics and Artificial Intelligence ETF has been around for nearly a decade. As you might expect, its best performance has come recently, thanks to the AI investment boom, and it has delivered 26% annualized returns over the past three years.

The Global X Robotics and Artificial Intelligence ETF has a 0.68% expense ratio, which is certainly on the higher end as far as index funds go. For example, the Invesco QQQ ETF (NASDAQ: QQQ) that tracks the Nasdaq-100 has a 0.20% expense ratio. But as a general rule, the more specialized an index fund is, the more you can expect to pay, and a 0.68% expense ratio is in-line with other robotics and AI ETFs.

As a side note, while an ETF expense ratio tells you the management fees associated with an investment, it isn't a fee you have to pay. It will simply be reflected in the performance of the fund over time.

A Cathie Wood ETF worth a closer look

To be sure, the Ark Autonomous Technology and Robotics ETF (NYSEMKT: ARKQ) isn't a pure-play robotics ETF, but pretty much all of its focuses are at least related to the robotics industry. For example, reusable rockets require significant automation, and advanced battery technologies are essential to powering next-generation automation systems, just to name a couple of the ETF's focus areas.

Unlike most ETFs, the Ark Autonomous Technology and Robotics ETF doesn't simply track an index of stocks. It is an actively managed ETF, which means that a portfolio manager (in this case notable tech investor Cathie Wood) select stocks with the goal of beating a benchmark index.

Perhaps my favorite thing about the Ark Autonomous Technology and Robotics ETF is that Wood and her team think outside the box when it comes to filling the portfolio. Sure, the number one holding, Tesla (NASDAQ: TSLA), is well-known (and has big ambitions in robotics), but some of the other top stocks -- such as Teradyne (NASDAQ: TER) and Archer Aviation (NYSE: ACHR) -- aren't widely known by investors.

The ETF has a 0.75% expense ratio, which isn't much higher than most AI and robotics index funds charge. If your goal is to own a collection of robotics stocks that have the potential to beat their peer group average, the Ark Autonomous Technology and Robotics ETF is worth a closer look.

Which should you buy?

Either of these ETFs could be a good fit if you want exposure to the robotics industry in your portfolio but don't necessarily want to do the homework and take on the risk associated with choosing individual stocks.

The best choice for you depends on your investment goals and risk tolerance, although both of these ETFs have similar investment strategies and should have comparable volatility over time. A smart approach would be to compare each fund's stated investment objectives and top holdings and see which is more aligned with what you're looking for in a robotics ETF. But having said that, I think the next several years are likely to be strong for both ETFs, and that investors who buy either will be glad they did.