There’s More to Investing in AI ETFs Than Nvidia

Nvidia has become ubiquitous with artificial intelligence. The maker of graphics processing units (GPUs), semiconductors optimized for running AI applications, has been by far the biggest beneficiary of the AI boom. 

Themes is the issuer of the Themes Generative AI ETF (WISE), an AI ETF that limits the weightings of any single stock, including Nvidia, which currently represents 5% of the fund’s portfolio. 

In this episode of Talk ETFs, Taylor Krystkowiak, vice president and investment strategist at Themes ETFs, discusses why this weighting scheme makes sense and what differentiates WISE from other AI ETFs on the market. 

Nvidia’s profits have increased almost eightfold over the past two years, sending its stock skyrocketing. With a market cap of over $2 trillion, Nvidia is a large holding in the SPDR S&P 500 ETF Trust (SPY) and an even larger holding in narrower ETFs like the Invesco QQQ Trust (QQQ) and the Technology Select Sector SPDR Fund (XLK). 

Larger still is Nvidia’s weighting in most thematic AI ETFs. As a giant in the artificial intelligence industry, it makes sense that Nvidia holds such importance in those funds. 

But Nvidia is likely to be just one of many companies that benefits from the growth of artificial intelligence, according to Krystkowiak.