4 Stocks Every AI ETF Is Buying—And They’re Not What You Think

Key Points

• As AI proliferates, so too do ETFs focused on AI-related stocks. Tracking the holdings of these funds can allow investors to take a more granular, individualized approach to the space.
• While many of the largest names in tech and chipmaking find their way into most AI ETF baskets, some other commonly held companies may not be as obvious.
• These include SNOW, ALAB, ORCL, and TSM, which may warrant a closer look by investors.

As artificial intelligence (AI) has exploded in popularity in recent years, investors have unsurprisingly scrambled to build exposure to companies they see as likely to benefit from this technological trend. Certainly, one straightforward way to try to achieve this goal is through AI-focused exchange-traded funds (ETFs).

Funds like the Global X Artificial Intelligence & Technology ETF NASDAQ: AIQ and the Invesco AI and Next Gen Software ETF NYSEARCA: IGPT give investors a ready-made portfolio of AI-related companies with a single trade.

Some investors may want to take a more granular approach, however. Rather than turn over control of the specific holdings and allocations to a fund manager, this strategy may involve targeting specific companies for individual investment.

To manage an AI-focused portfolio, investors might use ETFs as a guide, following the stocks that appear frequently in lists of these funds. Below, we look at the top holdings of four companies that appear often in the baskets of AI ETFs.

Cloud Data Platform Using AI Wins Analyst Support

Snowflake Inc. NYSE: SNOW operates a cloud-based data platform that consolidates and organizes customer data across multiple industries and sectors. The platform relies on AI to generate actionable business insights for clients.

SNOW shares appear among the top 15 holdings of 25 different ETFs, including many focused on AI and technology and others with a more general approach to large-cap growth stocks.

As Snowflake's customer base continues to grow, the company demonstrates the resilience of momentum in the cloud data AI space. The firm has solidly outperformed the market this year, returning more than 25% year-to-date (YTD).

It also enjoys widespread support from analysts, with 36 out of 43 calling SNOW a Buy. Despite the significant rally over recent months, analysts see SNOW shares continuing to rise by nearly 15% based on consensus estimates.

Major Earnings Win May Help Astera's Popularity

Astera Labs Inc. NASDAQ: ALAB has emerged as a major player in AI hardware. The company's retimers, memory controllers, and other equipment are increasingly in demand among customers looking to build up AI infrastructure.

ALAB shares are among the top holdings of 27 different ETFs, including AI—and semiconductor-focused funds and several growth stock funds.

Astera is fresh from an impressive earnings report for the second quarter, in which EPS more than tripled and revenue climbed by 150% thanks to massive sales of the company's Scorpio P CD switches, among other things.

The company's major partnerships should continue to drive significant growth in these areas: analysts see earnings climbing by 118% in the following year.

Strong Bullish Sentiment for Legacy Giant Oracle

Legacy tech giant Oracle Corp. NYSE: ORCL is known for its database, cloud computing, and enterprise software solutions, but it has an expanding footprint in AI as well. The company is increasingly integrating AI into its cloud offerings, including its popular Fusion suite. Unsurprisingly, among the 145 ETFs including ORCL shares as a top-15 holding, there are several prominent AI-focused funds.

A strong pipeline, double-digit revenue growth, and major new deals fuel a significant rally for Oracle, which has surged by 49% year-to-date. Thomas Hughes makes a compelling case for why the firm may still have another $75 per share in upside potential as well.

For some investors hesitant to take on the risk of smaller AI firms, Oracle can provide stability and solid fundamentals in a major tech firm while offering technology exposure.

Tariffs May Not Hold TSM Down

Taiwan Semiconductor Manufacturing Co. Ltd. NYSE: TSM is among the largest companies in the world. Still, investors may be cautious given the Trump administration's latest approach to tariffs in the semiconductor industry. Nonetheless, it remains a popular choice among fund managers, and 117 ETFs include TSM shares among their top positions.

This may be partly because TSM shares have recently reached new highs after climbing by more than 18% YTD. These gains may be driven by optimism that TSM can move enough of its production into the United States before the damage from tariffs becomes too significant.

This seems to be a popular view among analysts; all four TSM ratings are Buys, and analysts believe it still has room to grow.