Artificial Intelligence ETFs vs Individual Stocks: Which is Better?

Introduction

The AI stocks ETF market has reached a turning point. The global AI industry will surge to $826.7 billion by 2030, up from $184 billion in 2024. This incredible rise creates a crucial question for investors: Should you invest in individual AI companies or spread your risk through specialized ETFs?

Individual stocks give you focused exposure, but AI ETF stocks help you diversify across this game-changing sector. Our research shows 12 indices tracked by 12 ETFs are now available to investors who want AI exposure. The returns can be impressive. ARKQ, to cite an instance, has generated a stunning 355% return in the last decade. AI’s impact goes beyond investment returns and could add $15.7 trillion to the global economy by 2030.

We have analyzed the top AI ETFs to help you decide if these funds work better than picking individual stocks in this fast-changing space. Let’s take a closer look at how these investment options compare and which strategy might better fit your financial goals.

Global X Artificial Intelligence and Technology ETF (AIQ)

_{Image Source: Global X ETFs}

The Global X Artificial Intelligence & Technology ETF leads the market as the biggest AI ETF with $3.80 billion in assets as of July 2025. This investment vehicle launched on May 11, 2018, and takes a complete approach to capturing value in the fast-evolving artificial intelligence landscape.

AIQ Overview

Global X’s flagship AI fund tracks the Indxx Artificial Intelligence & Big Data Index performance. The fund targets companies that could benefit from AI technology development and use. The fund also has companies that provide hardware to help analyze big data with AI. AIQ gives investors broad exposure to the artificial intelligence ecosystem through its 86 holdings without putting too much risk in just a few companies.

The fund spreads investments in a variety of sectors. Information technology leads with 72.2% of holdings. Communication services follow at 10.0%, consumer discretionary at 9.1%, and industrials at 7.5%. US companies make up 83% of the portfolio, and the rest provides international exposure to balance geographic risk.

AIQ Key Features

The ETF’s carefully selected portfolio covers everything in the AI value chain. These are the top holdings as of June 2025:

• Tencent Holdings Ltd (3.73%)
• Netflix Inc (3.56%)
• Palantir Technologies (3.54%)
• Oracle Corporation (3.50%)
• Samsung Electronics (3.45%)

All but one of these holdings stay under 4% of the portfolio to ensure proper diversification. This strategy separates AIQ from other tech ETFs that might concentrate more heavily on fewer companies.

The fund shows a beta of 1.21 against the S&P 500, which indicates higher volatility than the broader market. Notwithstanding that, this higher volatility could mean better returns in a sector growing faster.

AIQ Pros and Cons

Pros:

• Exposure in a variety of AI ecosystem areas, including software, services, and infrastructure
• Strong liquidity with an average daily volume of 601,100 shares
• Balanced portfolio where no holding exceeds 4%
• Global reach beyond US markets reduces geographic concentration risk
• Solid track record since launch

Cons:

• 0.68% expense ratio tops the industry average of 0.37%
• Some companies like Netflix and StoneCo don’t focus mainly on AI
• Higher volatility with 22.00% standard deviation
• Market corrections hit harder (26% drop in 2022 vs. 18% for S&P 500)
• 30-Day SEC Yield of -0.09% means minimal income

AIQ Performance

The numbers show AIQ’s growth potential in the artificial intelligence sector. Here’s how the fund performed as of June 2025:

Source: Global X Funds

Since its 2018 launch, AIQ posted a 15.8% annualized return. This is a big deal as it means that it beat the S&P 500’s 14.2% over the same period. The fund captured AI sector growth even through market ups and downs.

AIQ beats its peers consistently. The fund returned 21.29% versus the category average of 14.86% over one year. Over three years, it returned 21.36% compared to the category’s 14.75%.

AIQ Pricing

The fund charges 0.68% annually, which means $68 for every $10,000 invested. While this tops the 0.37% ETF average, it stays competitive among thematic ETFs.

Here’s what else you should know about AIQ’s pricing:

• 0.05% 30-Day median bid-ask spread shows good liquidity
• $43.28 net asset value (NAV) as of July 11, 2025
• 87,860,002 total shares outstanding
• Semi-annual distributions with a 0.14% yield

AIQ Best Use Case

The Global X Artificial Intelligence & Technology ETF lets investors get diverse AI market exposure without picking individual winners in this fast-changing space. The fund works best for:

1. Long-term growth investors eyeing AI’s expected growth to $826.7 billion by 2030
2. Investors who want to diversify portfolios beyond core market ETFs
3. People seeking AI exposure with less single-stock risk
4. Those who can’t research individual AI companies

One analyst noted, “AIQ is not a gamble. Look at it as a calculated play on AI’s unstoppable rise”. The ETF’s balanced strategy helps investors get AI-driven returns without trying to pick breakthrough companies—something most individual investors find challenging.

The fund makes an excellent buy-and-hold choice to use AI’s long-term growth potential. It provides exposure beyond the usual companies to capture opportunities throughout the artificial intelligence value chain.

Global X Robotics and Artificial Intelligence ETF (BOTZ)

The robotics side of AI stands as another profitable frontier for investors, going beyond just software and algorithms. The Global X Robotics & Artificial Intelligence ETF (BOTZ) manages $2.72 billion in assets and lets investors focus on companies that develop physical AI applications across many industries.

BOTZ Overview

The 7-year-old BOTZ tracks the Indxx Global Robotics & Artificial Intelligence Thematic Index. This ETF targets companies that benefit from growing robotics and AI adoption. These include businesses working on industrial robotics, automation, non-industrial robots, and self-driving vehicles.

BOTZ stays focused on AI’s hardware and physical side, unlike broader tech ETFs. The fund has 83.42 million shares outstanding with a beta of 1.29, suggesting it moves more sharply than the broader market.

BOTZ Key Features

Leading robotics innovators make up the ETF’s carefully picked portfolio. Here are its top 10 holdings as of July 2025:

Source:

Japanese companies make up over 30% of BOTZ holdings, recognizing Japan’s dominance in industrial robotics. This gives investors exposure beyond U.S. markets. Industry leaders make up 59.3% of the portfolio through the top 10 holdings.

BOTZ Pros and Cons

Pros:

• Ground AI applications from medical robots to industrial automation systems
• Companies in the fund are profitable, innovative, and invest heavily in R&D
• BCA Research says robotics is “on the cusp of a new uptrend.”
• The U.S manufacturing comeback could speed up robotization
• The U.S has room to grow with lower robot density than other developed countries

Cons:

• Costs more at 0.68% compared to broad market ETFs
• Trading at 31x forward earnings, 45% above the S&P 500
• U.S. manufacturing looks weak and heads toward recession
• Trade issues slow down reshoring decisions
• YTD returns of 1.2% lag behind the broader market

BOTZ Performance

The fund showed strong results with 57% returns in the last three years. Recent performance has cooled off, though. Analysts say the ETF might struggle as “downgrades may be on the horizon as end customers defer orders.”

BOTZ returned 35.4% in 2023, demonstrating its ability to capture growth when markets favor AI. The robotics sector’s mood swings can lead to varying results.

BCA Research likes BOTZ’s long-term potential but stays cautious short term. This reflects today’s market, where AI excitement meets worries about high prices and economic uncertainty.

BOTZ Pricing

Investors pay $68 yearly per $10,000 invested with BOTZ’s 0.68% expense ratio. This costs more than broad market ETFs but beats other theme ETFs like ROBO Global Robotics and Automation Index ETF.

The fund’s latest numbers as of July 11, 2025:

• NAV: $32.33
• Market price: $32.07
• Day range: $31.87 – $32.32
• 52-week range: $23.82 – $34.86
• Dividend yield: 0.25%
• Portfolio turnover: 10%

BOTZ Best Use Case

BOTZ is a great way to invest in AI’s physical side. It works best for:

1. Strategic investors who can handle short-term ups and downs
2. Portfolios needing robotics exposure without picking stocks
3. Believers in manufacturing coming back to developed markets
4. People are betting on physical AI, machine learning, and better batteries, making robots more useful

Analysts say “robotics may not be attractive over a tactical investment horizon, but it is a compelling strategic investment theme”. This makes BOTZ perfect for patient investors looking years ahead at industry automation.

The ETF invests in companies already making money from AI and robotics, not just future promises. This appeals to investors who want AI exposure through businesses showing real results today.

iShares Future AI and Tech ETF (ARTY)

BlackRock manages the iShares Future AI & Tech ETF (ARTY), which has established itself in the artificial intelligence stocks ETF world by focusing on the entire AI value chain. The fund has grown to over $1.09 billion in assets under management since its launch in June 2018.

ARTY Overview

The fund tracks the Morningstar Global Artificial Intelligence Select Index to measure equity securities’ performance with exposure to artificial intelligence. ARTY invests at least 80% of its assets in component securities of the underlying index. It targets companies that provide products and services that will contribute to AI technologies. The fund covers multiple AI segments, including generative AI, AI data and infrastructure, AI software, and AI services.

ARTY’s portfolio consists of 49 holdings as of July 2025. This gives investors a carefully selected group of companies throughout the artificial intelligence ecosystem. The focused strategy sets it apart from broader technology ETFs that might water down exposure to AI-specific breakthroughs.

ARTY Key Features

The fund’s strategy focuses on getting targeted exposure to companies leading AI innovation throughout the value chain. Here are its top holdings:

• Advanced Micro Devices (AMD): 4.90%
• Vertiv Holdings: 4.82%
• Super Micro Computer: 4.78%
• Broadcom: 4.75%
• NVIDIA: 4.66%

These top 10 holdings make up about 41.04% of the portfolio, which balances concentration in industry leaders with diversification.

Information technology dominates the sector allocation at 83.93%, followed by communication (5.43%), industrials (4.61%), utilities (2.97%), and consumer discretionary (2.89%). This tech-heavy approach concentrates on companies directly involved in AI development and implementation.

ARTY Pros and Cons

Pros:

• Targeted exposure to AI innovators across the full value chain
• Long-term growth opportunities in digital disruption
• Works as a detailed technology exposure within a broader portfolio
• Beta of 1.37 suggests better performance in bullish markets
• Concentrated portfolio delivers meaningful exposure to the AI theme

Cons:

• 0.47% expense ratio costs more than many broad-market ETFs
• Higher volatility with 25.13% standard deviation over three years
• Low yield of 0.51% means limited income
• P/E ratio of 37.26 points to premium valuations
• Heavy tech sector concentration (83.93%) reduces diversification

ARTY Performance

The fund has shown strong returns across various timeframes:

Source: iShares

ARTY has posted a daily total return of 3.56% year-to-date in 2025, maintaining its upward trend. The fund’s equity beta of 1.31 against the broad market over three years confirms its higher relative volatility.

ARTY Pricing

The fund charges a 0.47% expense ratio, which means investors pay $47 yearly for every $10,000 invested. This breaks down to:

• Management fee: 0.47%
• Acquired fund fees: 0.00%
• Other expenses: 0.00%

The fund trades at $41.17 per share with a 52-week range of $26.31 to $41.85 as of July 2025. Its healthy liquidity averages 267,261 shares daily, which gives most investors enough trading flexibility. The 30-day SEC yield stands at -0.03%, showing minimal current income.

ARTY Best Use Case

ARTY works best as a targeted investment for people who want specific exposure to artificial intelligence ETF stocks without picking individual companies. The fund suits:

1. People who want to capture long-term growth from AI breakthroughs
2. Portfolios that need focused technology allocation alongside broader market exposure
3. Investors seeking exposure to the complete AI value chain from infrastructure to services
4. Growth-focused investors who accept higher volatility for potentially better returns

The fund’s targeted approach helps investors who believe in AI’s power to revolutionize industries but prefer ETF diversification over individual stocks. ARTY fits well in a balanced portfolio by providing focused exposure to promising tech trends without forcing investors to pick specific winners in this fast-changing space.

Robo Global Robotics and Automation Index ETF (ROBO)

The ROBO Global Robotics and Automation Index ETF (ROBO) stands out as one of the industry’s oldest investment vehicles for investors who want robotics and automation exposure. This groundbreaking fund launched in October 2013 and has grown to manage assets worth over $1.05 billion.

ROBO Overview

The ROBO ETF follows the ROBO Global Robotics & Automation Index and invests in companies that drive innovations in robotics, automation, and artificial intelligence. The fund’s original focus targets technologies that enable truly intelligent systems to sense, process, and act. It also includes companies that use these technologies to deliver products to businesses and consumers. The fund’s 76 holdings span multiple countries and provide varied exposure to the entire robotics ecosystem. ROBO trades on the NYSE with a global reach beyond U.S. borders.

ROBO Key Features

The fund’s portfolio covers the complete range of robotics and automation innovations. Here are ROBO’s top holdings as of July 2025:

• Symbotic Inc (2.24%)
• Ambarella Inc (1.85%)
• Celestica Inc (1.82%)
• Kardex Holding AG (1.81%)
• Novanta Inc (1.75%)

The fund prevents overconcentration by limiting each holding to 2.5% of the portfolio. ROBO allocates heavily to industrials (51.53%) and technology (39.48%). Smaller portions go to healthcare (6.18%), financial services (1.74%), and consumer cyclical (1.07%).

ROBO Pros and Cons

Pros:

• 12-year track record as one of the first robotics ETFs (launched 2013)
• Wide diversification through 76 holdings across multiple countries
• Coverage of the entire robotics value chain from components to end products
• Risk reduction through a 2.5% cap on individual holdings
• Exposure beyond U.S. markets

Cons:

• 0.95% expense ratio exceeds competing funds
• Recent market underperformance (-5.6% in Q2 2024)
• Low dividend yield at 0.55%
• 40% more volatile than the market with a 1.4 beta
• High valuation with 38.2x forward P/E as of June 2024

ROBO Performance

Here’s how the fund has performed across different timeframes:

Source: Yahoo Finance

The fund’s year-to-date return stands at 1.85% as of mid-2025. Recent performance suffered from 14 months of negative Global Purchasing Managers’ Index and slower Chinese growth. Analysts expect 5.2% sales growth and 7.0% EPS growth in 2024. These numbers could jump to 9.5% sales growth and 21.3% EPS growth in 2025.

ROBO Pricing

ROBO’s expense ratio of 0.95% means investors pay $95 yearly per $10,000 invested. This rate substantially exceeds broad market ETFs and some competing robotics ETFs like BOTZ (0.68%). Additional pricing details include:

• NAV per unit: $60.50 (as of July 2025)
• Median 30-day bid/ask spread: 0.23%
• Shares outstanding: 17,450,000
• Annual dividend yield: 0.55%

ROBO Best Use Case

ROBO ETF works best as an investment vehicle to gain exposure to physical AI implementation through robotics and automation. The fund suits:

1. Long-term investors looking to benefit from the global robotics technology market’s growth from $72.17 billion in 2022 to $283.19 billion by 2032
2. Portfolios that need robotics diversification without single-company risk
3. Investors who see AI, robotics, and energy innovation as “the technology stack of our future”
4. Those betting on falling robot costs, which dropped from $46,000 in 2010 to $27,000 in 2017 and could go below $11,000 by 2025

The fund’s wide-ranging approach helps investors access the entire robotics ecosystem, not just the popular companies making headlines.

First Trust Nasdaq Artificial Intelligence and Robotics ETF (ROBT)

First Trust Nasdaq Artificial Intelligence and Robotics ETF (ROBT) stands out with its three-tier classification system that provides a well-laid-out approach to AI investing. This mid-sized fund manages assets worth $506 million and gives investors access to companies that lead innovations in AI software and robotics applications.

ROBT Overview

The fund started in February 2018 and follows the Nasdaq CTA Artificial Intelligence and Robotics Index. ROBT invests 90% of its assets in companies that work in the AI and robotics segments of technology and industrial sectors. The portfolio consists of 101 stocks spread across multiple countries. U.S. companies make up 65.18% of the holdings. The fund also has significant investments in Japan (8.87%), Israel (3.05%), and the United Kingdom (2.97%).

ROBT Key Features

The fund’s classification system, developed with the Consumer Technology Association, sets it apart:

• Enablers (25% weight): Companies that create building blocks for AI/robotics (semiconductors, autonomous systems)
• Engagers (60% weight): Companies that develop AI products, software, or systems
• Enhancers (15% weight): Companies that provide value-added services within the AI ecosystem

Symbotic Inc. (2.59%), Upstart Holdings (2.53%), and AeroVironment (2.34%) lead the holdings. No single position makes up more than 2.6% of assets, which helps spread out risk.

ROBT Pros and Cons

Pros:

• Classification system targets exposure across the AI value chain
• Global diversification spans 10 countries in top holdings
• Balanced sector allocation with 51.46% in information technology and 20.89% in industrials
• Equal-weighting within categories reduces individual company risk

Cons:

• The expense ratio of 0.65% costs more than broader ETFs
• Returns fall below category average with a 3-star Morningstar rating
• Returns since inception lag behind S&P 500 (7.05% vs. 13.86% annualized)
• Low yield with 0.46% distribution rate

ROBT Performance

Source:

The fund shows volatility with a 3-year standard deviation of 23.26% and a beta of 1.28 compared to the S&P 500.

ROBT Pricing

The fund charges a 0.65% expense ratio, which means $65 yearly per $10,000 invested. This places it in the second-lowest fee quintile among similar funds. The current price is $48.31, with a 52-week range of $34.38-$49.29. A 30-day median bid/ask spread of 0.10% shows good liquidity.

ROBT Best Use Case

ROBT appeals to investors who want a systematic approach to AI stock exposure through its classification system. The fund works well for those seeking balanced exposure across the AI/robotics ecosystem instead of focusing on a few large tech companies. The top 10 holdings make up just 20.51% of the portfolio, which is much lower than other AI stocks ETFs and helps reduce individual stock risk.

Comparison Table

Conclusion

The choice between artificial intelligence ETFs and individual stocks ended up depending on your investment goals, risk tolerance, and market expertise. Our analysis shows how each AI ETF has unique advantages. They offer diversified exposure across the AI ecosystem and reduce single-stock risk. Funds like AIQ give broad technology coverage. BOTZ targets robotics hardware specifically, while ARTY covers the entire AI value chain.

AI ETFs appeal more to risk-averse investors because of their built-in diversification. On top of that, these funds let you access global AI leaders beyond well-known names. You get exposure to emerging innovators you might miss otherwise. The expense ratios from 0.47% (ARTY) to 0.95% (ROBO) cover professional management and make investing simpler compared to managing individual stocks.

These ETFs show strong growth potential. Many have outperformed broader market indices over several periods. All the same, individual AI stocks could bring better returns if you’re ready to do thorough research and handle higher volatility. NVIDIA has outperformed even the best AI ETFs by a lot during certain periods.

Your time horizon is a vital part of this decision. Long-term investors might like the “set-and-forget” nature of ETFs. These funds adjust holdings automatically as the digital world changes. Active traders might prefer moving quickly with individual AI stocks based on market changes or company news.

Many successful investors use both approaches. You could start with core positions in AI ETFs and put a smaller portion into individual companies with exceptional potential. This balanced approach lets you tap into the full potential of AI sector growth while possibly getting bigger returns from specific stocks.

The AI revolution keeps gaining momentum toward its projected $826.7 billion market size by 2030. Whatever investment approach you pick, keeping exposure to this revolutionary technology becomes essential for growth-oriented portfolios. The real question isn’t whether to invest in AI, but which vehicle best matches your financial situation and investment philosophy.

Key Takeaways

The AI investment landscape offers compelling opportunities through both ETFs and individual stocks, with the global AI market projected to reach $826.7 billion by 2030.

• AI ETFs provide diversified exposure with built-in risk management – funds like AIQ (22.83% 1-year return) and ARTY (23.34%) spread risk across 49-101 holdings while capturing sector growth.

• Individual stocks offer higher return potential but require active management – companies like NVIDIA have outperformed AI ETFs during certain periods, but demand research expertise and higher risk tolerance.

• Expense ratios vary significantly across AI ETFs, ranging from 0.47% (ARTY) to 0.95% (ROBO), making cost comparison crucial for long-term returns.

• Geographic and sector focus differ substantially between funds – BOTZ emphasizes Japanese robotics companies, while AIQ focuses 83% on US tech firms, affecting diversification benefits.

• Hybrid approach maximizes opportunities while managing risk – combining core AI ETF positions with selective individual stock picks allows investors to capture broad sector growth plus potential outsized returns.

The choice between AI ETFs and individual stocks ultimately depends on your risk tolerance, time horizon, and research capabilities, with many successful investors using both strategies complementarily.

FAQs

Q1. What are the advantages of investing in AI ETFs? AI ETFs offer diversified exposure to the growing AI sector, reducing single-company risk while providing potential for long-term growth as AI technologies advance across industries. They allow investors to benefit from AI’s expansion without needing to pick individual winners.

Q2. How do AI ETFs compare to individual AI stocks in terms of risk and return? AI ETFs generally offer lower risk through diversification but may have more modest returns compared to successful individual AI stocks. ETFs provide consistent growth potential with less volatility, while individual stocks can offer higher returns but come with increased company-specific risks.

Q3. What factors should I consider when choosing an AI ETF? Key considerations include the ETF’s expense ratio, number of holdings, geographic focus, sector allocation, and historical performance. Also, evaluate the fund’s specific AI focus (e.g., software, robotics, or full value chain) to ensure it aligns with your investment goals.

Q4. Are there any downsides to investing in AI ETFs? Potential drawbacks include higher expense ratios compared to broad market ETFs, limited dividend yields, and the possibility of underperforming during certain market conditions. Some AI ETFs may also have higher volatility than the overall market.

Q5. How can I incorporate AI investments into my portfolio? A balanced approach could involve allocating a portion of your portfolio to one or more AI ETFs for broad sector exposure, while potentially dedicating a smaller percentage to individual AI stocks you believe have exceptional potential. This strategy allows you to capture overall AI growth while maintaining the opportunity for higher returns from select companies.