OpenAI released its groundbreaking artificial intelligence (AI) chatbot, ChatGPT, in November 2022, and by January 2023, it had amassed 100 million users. This was the moment AI went mainstream, and since then, companies operating in this emerging industry have experienced astronomical growth.
Nvidia stock, for example, is up tenfold since the start of 2023, while Palantir Technologies stock has soared more than 20-fold. Hyperscale cloud providers like Amazon and Alphabet have each more than doubled in value over the same period.
All of the names I just mentioned can be found in the Roundhill Generative AI and Technology ETF (CHAT +3.74%), an exchange-traded fund (ETF) that invests exclusively in companies developing AI infrastructure, platforms, and software.
The Iran war has prompted a broad market sell-off, so investors have an opportunity to scoop up a single share of the Roundhill ETF for less than $62 as of the close of trading Tuesday, a 7% discount to its all-time high.
Image source: Getty Images.
An actively managed ETF packed with AI leaders
ETFs can either be passively managed or actively managed. A passive fund tracks the performance of an index like the S&P 500 (^GSPC +0.66%), so its portfolio managers don’t really have any influence over its holdings. An active fund, on the other hand, is managed by a team of professionals who choose which stocks to buy and sell, based on the fund’s theme and what they believe will deliver the best returns.
The Roundhill Generative AI and Technology ETF is actively managed, and it has led to market-crushing returns since its launch in May 2023. However, it charges investors higher fees than most passive index funds, and there is an elevated risk of volatility because of its sole focus on the AI industry.
The Roundhill ETF currently holds 44 stocks in its portfolio, including almost every major AI name. I’ve listed 10 of its most noteworthy holdings below (though not all of them are among its 10 largest positions).
|
Stock |
Roundhill ETF Portfolio Weighting |
|---|---|
|
Alphabet |
6.41% |
|
Nvidia |
6.41% |
|
Microsoft |
4.19% |
|
Amazon |
4.01% |
|
Advanced Micro Devices |
3.35% |
|
Broadcom |
3.11% |
|
Micron Technology |
3.03% |
|
Meta Platforms |
2.44% |
|
Palantir Technologies |
2.27% |
|
CoreWeave |
1.24% |
Data source: Roundhill Investments. Portfolio weightings are accurate as of March 29, 2026, and are subject to change.
Those notable names make up a combined 36.4% of its entire portfolio (by value). As you can see, AI infrastructure companies feature prominently in the ETF. Nvidia supplies the world’s most powerful graphics processing units (GPUs), which are the main chips used in data centers for AI development. AMD is one of Nvidia’s top competitors, and Broadcom has also become a rival with its custom AI accelerators, which it calls application-specific integrated circuits.
Alphabet, Microsoft, and Amazon are among the biggest buyers of data center chips, and they rent the computing capacity to enterprises and AI developers via the cloud. This has become a lucrative business model; all three have experienced a sharp acceleration in their cloud revenue growth since early 2023.
Meta Platforms and Palantir are examples of companies directly monetizing AI software. Meta uses AI in the content recommendation algorithms on its social media platforms, which is boosting engagement and driving an increase in advertising revenue. Palantir, on the other hand, developed platforms like Gotham and Foundry, which help organizations extract maximum value from their internal data.
The Roundhill ETF has produced blistering gains
The Roundhill Generative AI and Technology ETF was established in May 2023, so it doesn’t have a very long track record for investors to assess. Plus, it’s unclear how the ETF will perform when the AI industry hits a speed bump, because it has mostly been smooth sailing for tech in the past three years.
With all of that said, the Roundhill ETF has delivered an incredible return of 132% since its inception, crushing the S&P 500, which is up just 51% over the same period. It has also outperformed the Nasdaq-100 technology index, which has gained 67%. In other words, the fund’s strategy has paid off so far.
Tidal Trust II – Roundhill Generative Ai & Technology ETF
Today’s Change
(3.74%) $2.31
Current Price
$64.16
Key Data Points
Day’s Range
$63.76 – $64.56
52wk Range
$28.96 – $68.12
Volume
92K
But it costs money to have a team of experts picking stocks full time. As a result, the Roundhill ETF has an expense ratio of 0.75%, which is the proportion of the fund deducted each year to cover management costs. That means an investment of $10,000 would incur an annual fee of $75. That may not sound like much, but it’s 25 times more than an investor would pay for an identical stake in the Vanguard S&P 500 ETF, which has an expense ratio of just 0.03%. And over time, fees can meaningfully eat into an investor’s long-term returns.
Costs aside, investors shouldn’t bet the farm on the Roundhill ETF because of its complete exposure to the AI industry, which gives it real industry-specific downside risks. However, the ETF would be a great addition to a diversified portfolio, especially if that portfolio currently lacks enough exposure to the AI industry. And the recent market sell-off presents investors with an opportunity to buy it at a discount.
