Nvidia, Meta, Apple, and Microsoft Could Help This Stock-Split ETF Turn $200,000 Into $1 Million

Roughly 70% of top executives believe artificial intelligence (AI) will transform the way their organizations create value over the next three years, according to a survey by consulting firm PwC published earlier this year. In PwC's report, it projects AI technology will add a whopping $15.7 trillion to the global economy by 2030.

Events like the dot-com boom and bust in the late 1990s and early 2000s suggest that picking winners and losers in new industries like AI won't be easy. Not every AI company will survive, let alone thrive. That's why buying an AI-focused exchange-traded fund (ETF) can be a great option for investors. It can offer exposure to a broad variety of AI stocks neatly packaged into one security, and it is far less susceptible to catastrophic losses if one or two fail.

The iShares Expanded Tech Sector ETF (NYSEMKT: IGM) owns 281 different stocks, but it holds a high concentration of the most popular AI names.

The iShares ETF recently completed a stock split

The iShares ETF delivered a compound annual return of 20.2% over the last 10 years, crushing the 13.2% average annual gain in the S&P 500 index over the same period.

The powerful returns propelled the ETF to a price per share of more than $510 in March, which made it somewhat inaccessible to smaller investors. As a result, iShares executed a 6-for-1 stock split, which increased the number of shares in circulation sixfold and organically reduced the price per share by a proportional amount. Now, investors can buy the ETF for roughly $92.

The ETF has large holdings in leading AI stocks like Meta Platforms, Apple, Microsoft, and Nvidia, which are likely to continue driving its gains. Here's how those stocks can help this ETF turn a $200,000 investment into $1 million over the long term -- but don't worry, investors with any starting balance can earn a fivefold return if this scenario plays out.

Every popular technology stock, packed into one ETF

As I mentioned at the top, the iShares ETF holds 281 different stocks. It was established in 2001 so it has helped investors navigate several technology cycles from the internet to cloud computing to enterprise software.

AI is the dominant theme in the tech sector right now. The top four holdings in the iShares ETF account for 34.3% of the total value of its entire portfolio, and each of them has a dominant presence in AI:

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