Is an AI-Focused ETF the Right Move for a 2026 Portfolio?

With communication services and technology ranking as the two best-performing sectors in the S&P 500 (SNPINDEX: ^GSPC) in 2025, it's not surprising that market participants are enthusiastic about the 2026 outlook for artificial intelligence (AI) assets.

Data confirm that ebullience. Nearly two-thirds of investors surveyed by the Motley Fool believe AI-related companies will provide long-term ballast to their portfolios. Notably, more than 90% of current owners of AI equities and related exchange-traded funds (ETFs) plan to maintain or increase their holdings.

AI ETFs could be portfolio necessities in 2026. Image source: Getty Images.

There are some interesting demographic tidbits regarding millennials and Gen Z, as well as affluent investors, who signal the most confidence about AI's long-term trajectory. That's pertinent as it relates to AI ETFs because newer and younger market participants are more likely to use ETFs or even build entire portfolios with just ETFs than their older counterparts.

To be sure, all of those are interesting facts, but there's more to the AI ETF story.

2026 stars aligning for AI ETFs

Home to $7.41 billion in assets under management (AUM), the Global X Artificial Intelligence & Technology ETF (NASDAQ: AIQ) is the largest dedicated AI ETF. Several others have north of $1 billion in AUM, and a couple more are close to reaching that lofty status.

Underscoring the relevance of AI ETFs in 2026 are expectations of ongoing massive spending by hyperscalers. Citing consensus forecasts, Goldman Sachs estimates that AI infrastructure spending in 2026 will reach $527 billion, surpassing the $465 billion projected at the end of the third quarter.

Perhaps highlighting the benefits of the basket approach offered by AI ETFs, Goldman notes that since June 2025, the stock price correlations of hyperscalers to spending-driven headlines have materially declined. The bank notes that this is a sign investors are scouring the market for the next group of AI winners outside the "Magnificent Seven." With AI ETFs, investors don't need to pick individual winners because the funds perform that heavy lifting.

It's a good thing, too, because an array of catalysts will support the AI investment thesis in 2026, but those sparks won't apply to every AI stock. Those factors include increase AI/human partnerships in the workplace, strides in healthcare, broader research capabilities, and another leap forward by large language models (LLMs), among others.

AI ETFs merit attention and homework

Even when stripping out traditional technology ETFs and those funds that utilize AI to select stocks, the universe of dedicated AI ETFs is expansive, but that does not guarantee similarities.

Some AI ETFs are index funds, while others are actively managed. Weighting by market capitalization is standard in this space, meaning that those ETFs will allocate large percentages of their portfolios to a few stocks; however, there are AI ETFs that employ more balanced approaches.

There are also industry-level considerations. Some AI ETFs are arguably disguised as semiconductor funds, while others lean more heavily into hyperscalers.

Regardless of industry approach, the bulk of AI ETFs on the market are dominated by communication services and tech stocks, though some of these products have more expansive sector allocations.

Bottom line: 2026 will be another year of headline-grabbing and opportunity for AI ETFs, but investors need to know what's under the hood.

Todd Shriber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Goldman Sachs Group. The Motley Fool has a disclosure policy.