Hot tech stock ETFs, from AI to quantum computing, have made investors lots of money. Is it time to sell?

Artificial quality has go 1 of the biggest concern stories successful the market, helping thrust a surge of assets into thematic exchange-traded funds that fto retail investors stake connected large exertion trends. But experts pass that these funds tin autumn arsenic rapidly arsenic they rise. It's a elemental yet important constituent for investors to support successful caput arsenic tech stocks look much vulnerable, and are leading the marketplace lower successful caller days. The Nasdaq has been flirting with a autumn beneath its 50-day moving mean for the archetypal clip since the April downturn and posted its third-straight losing league connected Thursday.

"We person astir 400 ETFs astatine ETF Action that we classify arsenic thematic," Mike Akins, founding spouse astatine probe steadfast ETF Action, said connected CNBC's "ETF Edge" connected Monday. "The apical performer is up implicit 150% twelvemonth to day ... there's respective antagonistic 10%," helium said.

Investors are drawn to thematic ETFs covering trends from AI to quantum computing, cleanable vigor and defence technology, but they often place the risks, including however volatile the portfolios tin be. Because thematic ETFs absorption connected circumstantial sectors oregon technologies alternatively than conscionable tracking wide indexes, they tin present beardown gains erstwhile a taxable is successful favor, but momentum whitethorn fade.

ETF Action divides the thematic ETF beingness into 12 large categories with galore subgroups. Within the disruptive exertion class alone, which includes artificial intelligence, flows person been tremendous this year. "AI disruptive tech has seen astir $20 cardinal successful flows twelvemonth to date," Akins said. Roughly $15 cardinal of that, helium said, has "AI" successful the ETF name.

The surge has helped assistance funds similar the Global X Artificial Intelligence & Technology ETF (AIQ) which has grown to astir $7 cardinal successful assets, attracting astir $3 cardinal successful nett flows since the opening of the year, according to ETF.com. Its apical holdings are Advanced Micro Devices, Alphabet, Samsung, Tesla and Alibaba. Another illustration from Global X is the Robotics & Artificial Intelligence ETF (BOTZ), which has astir $3 cardinal successful assets nether management. Its apical holdings are Nvidia, ABB, Fanuc, Intuitive Surgical and Keyence.

Thematic ETFs bash necessitate much probe than accepted funds. Case successful point: among the 18 ETFs that ETF Action classifies arsenic AI-focused, Akins said determination is simply a show dispersed of 60% this year.

"Every clip you spot a caller ETF travel to market, it introduces important tracking mistake from conscionable investing successful the market," helium said.

Through the archetypal 9 months of 2025, close to 800 ETFs were launched, besting a grounds for ETF launches acceptable conscionable past year, according to Reuters. Morningstar data indicates determination are present much ETFs (over 4,300 U.S. listed ETFs) than idiosyncratic stocks traded successful the U.S.

Akins described the maturation of the ETF marketplace arsenic "overwhelmingly positive" to the capitalist experience, but added that the increasing fig of opportunities besides implies much risk.

Some of the themes that led the aboriginal question of thematic investing tin suffer momentum arsenic stand-alone concern stories adjacent arsenic the trends stay cardinal to the exertion assemblage and market, Akins said. ETFs constructed astir the themes of unreality computing and next-generation connectivity, for example, person seen billions of dollars successful outflows implicit the past fewer years arsenic the companies that were apical holdings matured and became portion of broad-based banal marketplace indexes already held by investors. But helium added that the timeline for each trend's momentum is hard to pin down.

"I deliberation each taxable is unsocial to itself, truthful immoderate are going to play retired longer than others," Akins said. "That's portion of the communicative with this abstraction ... there's decidedly the thought I'm going to put successful this due to the fact that I judge it's going to play retired implicit the adjacent 3 to 7 years."

Despite the caller jitters successful the banal marketplace and tech stocks specifically, it is important to enactment that the Nasdaq is little than 5% disconnected an all-time grounds level and has gained adjacent to 250% since its Covid debased point. Akins said thematic investing is worthwhile for investors who recognize what they are buying and tin tolerate short-term volatility.

Seizing moments of accidental successful the marketplace tin besides beryllium cardinal with thematic strategies. "Themes tin tally very, precise quickly, truthful you should beryllium taking advantage," Akins said. Significant gains successful a abbreviated play of clip whitethorn pb investors to see taking immoderate profits. "You inactive privation to person an allocation to the theme, but possibly instrumentality immoderate disconnected the top," helium added.

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