Worried About Which AI Stock to Buy? This Low-Cost ETF Lets You Own the Whole Trade.
Written by Daniel Sparks for The Motley Fool -> A sharp early-June sell-off in chip stocks reminded investors how quickly a crowded trade can turn. This Vanguard fund holds more than 300 technology names and charges one of the lowest fees in its category. Its three largest pos
A sharp early-June sell-off in chip stocks reminded investors how quickly a crowded trade can turn.
This Vanguard fund holds more than 300 technology names and charges one of the lowest fees in its category.
Its three largest positions account for nearly half the fund, so the diversification has limits.
Picking the right artificial intelligence (AI) stock is hard, and the past week made that especially clear. Chip stocks tumbled in early June, dragging the Nasdaq Composite down about 4% on June 5 for its worst session since the tariff turmoil of early 2025. Names that had carried the market higher for months -- Advanced Micro Devices , Intel , and others tied to AI hardware -- gave back chunks of enormous gains in a matter of days. And some AI stocks fell far more sharply than others.
For an investor trying to decide which single AI name to own, that kind of move is unsettling. Buy the wrong one at the wrong moment, and a year of patience can unwind in an afternoon.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
There is another way to play the theme, though, and it doesn't require getting any one stock right. The Vanguard Information Technology ETF (NYSEMKT: VGT) gives investors a single purchase that gives them a stake in more than 300 technology companies, at a cost hard to beat. For investors nervous about concentration but unwilling to sit out the AI build-out entirely, it deserves a close look -- with eyes open to what it actually holds.
Start with the fee, because it is the easiest thing to get right. The fund carries an expense ratio of just 0.09%, which works out to about $9 a year on every $10,000 invested. That is a fraction of what most actively managed technology funds charge, and over a multidecade holding period, the gap compounds into a material cost advantage.
