**Exploring the AI-Driven ETF: A Potential Play on the S&P 500**
**The S&P 500’s Bull Run**
The S&P 500 is still in the midst of a bull market, which has been ongoing since October 2022. In fact, it’s coming off back-to-back annual gains of over 25% in 2023 and 2024, a feat it has only achieved one other time since 1957. **The Sell-Off: A Buying Opportunity?**
However, the S&P 500 is currently in sell-off mode, declining more than 9% from its recent all-time high so far. Many of the stocks that drove the index’s incredible gains over the last two years are currently down even more than that, particularly those leading the artificial intelligence (AI) race. * Nvidia
* Microsoft
* Alphabet
* Amazon
* Salesforce
Since the U.S. stock market always trends higher over the long term, this might be a great time for investors to scoop up some bargains. **Diversified Exposure to AI Stocks**
Rather than picking winners and losers, it might be a good idea to buy an exchange-traded fund (ETF) that focuses on high-growth AI stocks instead. The Roundhill Generative AI and Technology ETF (CHAT -2.64%) offers diversified exposure to the industry through its portfolio of 37 top AI names, and investors can pick up a single share for under $40. **Investing Across the AI Spectrum**
The Roundhill Generative AI and Technology ETF invests in companies developing the platforms, infrastructure, and software that are driving the AI industry forward. It’s an actively managed fund, so a team of experts at Roundhill selects which stocks to buy and sell based on their presence in AI and their potential to generate returns for investors. * Nvidia (24.3% of the portfolio)
* Microsoft (14.5% of the portfolio)
* Alphabet (10.3% of the portfolio)
* Amazon (9.6% of the portfolio)
* Salesforce (4.1% of the portfolio)
**AI Stocks Beyond the Leaders**
But the Roundhill ETF also holds a number of other AI stocks that sometimes fly under the radar:
* Taiwan Semi (26.3% of the portfolio): the most influential chip company in the AI industry, which owes a lot of its success to its key manufacturing partner, Taiwan Semi. * Oracle (15.5% of the portfolio): a major buyer of chips from the likes of Nvidia, which operates some of the best data centers in the world for AI training and AI inference. * Salesforce (10.5% of the portfolio): operates an industry-leading customer relationship management (CRM) platform that uses AI to accelerate workflows. * Snowflake (8.4% of the portfolio): offers a suite of cloud services, including a new Cortex AI platform that allows developers to access ready-made large language models. * Micron Technology (6.2% of the portfolio): a leading supplier of memory and storage chips, which are becoming increasingly important in AI workloads. **The Long-Term Potential of the Roundhill ETF**
The Roundhill ETF was established in 2023, so it doesn’t have a very long track record for investors to analyze. Nevertheless, it did soar by almost 31% last year, comfortably beating the S&P 500, which rose by 25% (including dividends). * Nvidia: +171%
* Meta: +65%
However, those stocks have started 2025 on the back foot, which has triggered a 16% year-to-date decline in the ETF. While a correction of that magnitude can be unsettling, it does create a buying opportunity for investors seeking exposure to the AI industry. **A Warning: Diversification is Key**
Citing a study by Goldman Sachs, Roundhill thinks AI can create $7 trillion in global economic activity by 2032, and a lot of that value will come from the companies in this ETF. Plus, Goldman isn’t the only bullish firm — PwC estimates AI will add $15.7 trillion to the global economy by 2030, and Cathie Wood’s Ark Investment Management places that number at a staggering $200 trillion. As a result, the sell-off in the broader market might prove to have been the ideal time to buy the Roundhill ETF when investors look back on this moment in a few years.
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