Forget Nvidia. Discover the ultimate growth investment in artificial intelligence (AI)

When you consider investing in artificial intelligence (AI), you automatically think of a name that is constantly making headlines. I’m talking about the leading AI chip designer Nvidia (NVDA 1.75%). The company’s market dominance has helped its profits soar by triple digits in recent quarters and caused the stock price to rise more than 200% over the past year.

That’s impressive, and Nvidia has what it takes to continue growing over time. But the ultimate long-term investment in AI may not be in just one stock, but rather several. This can seem daunting, as it involves identifying companies now that could become AI winners in the future. The good news, however, is that you don’t have to do all that heavy lifting yourself.

In the following investment, it’s done for you, which means you don’t have to lift a finger. Over time, you could benefit significantly from the AI ​​boom. Let’s find out more about this AI investment you won’t want to miss.

Image source: Getty Images.

Investing in Many Potential Winners

So how do you invest in a basket of potential winners in the stock market without choosing the stocks yourself? You look at an exchange-traded fund (ETF), which follows a particular theme and trades daily on the market like an individual stock. In this case, we are looking for the AI ​​theme, and you will find it in the WisdomTree Artificial Intelligence and Innovation Fund (WTAI -0.05%).

This fund tracks the performance of the WisdomTree Artificial Intelligence and Innovation Index; the index and fund include today’s leading AI players. You probably won’t be surprised to learn that the fund’s top holding is Nvidia, weighted at over 3%. But by investing here you can also bet on many other potential winners and winners. Other major titles include Arm holds, QualcommAnd Metaplatforms. Unsurprisingly, the information technology sector represents more than 79% of the fund.

That said, the fund recognizes that potential AI winners populate a wide variety of sectors, so it includes stocks ranging from healthcare to industrials and consumer discretionary. By investing in the WisdomTree fund, you can benefit from a variety of AI success stories – from the famous chipmaker to the pharmaceutical company developing potentially life-saving drugs.

The pros and cons

Of course, there are pros and cons to everything, and here two of the cons are: Firstly, with any ETF it is important to remember that you will need to consider the fees associated with managing the fund. These expenses, if too high, could harm your returns over time. It is therefore important to choose an ETF with an expense ratio below 1%. The expense ratio of the WisdomTree fund is 0.45%, meeting this criterion.

The second point is that investing in an ETF is unlikely to produce the same level of returns that you’ll find in one or two winning AI stocks over a few years. Even though the WisdomTree fund owns, say, Nvidia stock, the weight of other stocks also comes into play, so the ETF doesn’t skyrocket with the chip designer. On the other hand, it works to your advantage when one of the ETF’s holdings falls: the gains of the other shares limit your losses.

Now let’s move on to the big “advantage” of investing in the WisdomTree ETF, and that is the idea, as mentioned above, of having access to many possible winners in AI. In a short period of time, this might not result in a massive increase in the fund, but over time, as AI growth gains momentum, the performance of many of these AI companies could take off. As a result, the performance of the ETF could follow.

So yes, Nvidia and other companies with successful AI stories are making great investments today. But in the long run, a tool that allows you to invest in several of these players could maximize your earning potential and, at the same time, reduce your risk. And that’s why today, the WisdomTree Artificial Intelligence and Innovation Fund is the ultimate investment in the growth of AI.