Nvidia, Meta, Apple, and Microsoft Could Help This Magnificent ETF Turn $250,000 Into $1 Million

Artificial intelligence (AI) might be the most revolutionary technology in a generation. Depending on which Wall Street forecast you rely upon, it could add between $7 trillion and $200 trillion to the global economy over the next decade.

Some companies are already reaping the rewards. Nvidia, for example, has added a staggering $3.2 trillion to its market capitalization in the last two years alone.

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But previous tech revolutions, like the dot-com internet boom and bust in the late 1990s and early 2000s, have taught us that picking winners and losers won't be easy. After all, Amazon started out by selling books online in 1994, but most of its profit now comes from cloud computing instead -- a business that didn't even exist when the company was founded. Who could have predicted that?

Investors don't have to be expert stock pickers if they buy an AI-focused exchange-traded fund (ETF). The iShares Expanded Tech Sector ETF (NYSEMKT: IGM) owns practically every AI stock an investor could want, and it could turn an investment of $250,000 into $1 million over the long term.

The objective of the iShares ETF is to offer investors broad exposure to technology and technology-related companies spanning hardware, software, interactive media, and more. It was established in 2001 so it has navigated several tech booms including the internet, cloud computing, and enterprise software.

The ETF currently holds 278 different stocks, but it's relatively concentrated. Its top four positions alone account for 33.1% of the total value of its portfolio, but they are among the key players in the AI industry:

Data source: iShares. Portfolio weightings are accurate as of Nov. 12, 2024, and are subject to change.

Nvidia supplies powerful graphics processors (GPUs) for the data center, which are used to develop AI models. Demand continues to outstrip supply, and the company's revenue has soared by triple-digit percentages in each of the last five quarters. Nvidia just started shipping its new Blackwell GPUs, which offer an incredible leap in performance and cost efficiency, so they should drive strong sales growth for the foreseeable future.

Meta and Microsoft are both customers of Nvidia. Meta fills its data centers with GPUs to train its Llama large language models (LLMs), which it's using to create new AI features for its Facebook and Instagram social networks. Microsoft, on the other hand, created a virtual assistant called Copilot which can generate text, images, and even computer code. Plus, the Microsoft Azure cloud platform offers developers access to the computing capacity and LLMs they need to build their own AI software.