Artificial intelligence (s), of course, has been the hottest sector of the stock market over the last few years. Those who saw this trend five years ago probably created an incredible return. One fund (ETF) on the stock exchange that did well Vanguard Information Technology ETF(Freshly taken: VGT)This increased by more than 143% over the last five years and increased by more than 1400% since ETF was launched in 2004.
Although there are many questions about AI opportunities and the sector is likely to not move a straight line similar to the boom of the Internet, there is a good chance that AI will significantly change our daily lives and have a long runway. Can $ 50,000 investment in VGT transform a million?
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VGT is a passively controlled ETF that seeks to provide investors a wide range of information technology space, which is quickly consumed by the largest conglomerates of technology, which are pouring tens of billions into AI and capital costs that will revolutionize. Here are the top 10 VGT holdings, the percentage of which is a fund for each campaign (September 21):
The company
Percentage of the fund
Nvidia
17.18%
Microsoft
13.73%
An apple
13.05%
Broadcom
4.32%
Oracle
2.02%
Palantir
1.86%
Cisco systems
1.50%
Advanced micro devices
1.44%
Salesforce
1.32%
International business machines
1.23%
Source: Vanguard.
As you can see from the list above, the biggest holdings are NVIDIA, the main Pick-And Shovel semiconductor game, which promotes AI ecosystem, and Microsoft, one of the main hypercals poured by billions to data centers. Microsoft also develops a lot of AI tools that companies can use to make their business more efficient.
Apple did not prepare as much as Magnificent Seven. However, many still see Apple as the main AI player, all the more so because it integrates more AI features into its large set of consumer products, from the iPhone to Airpods.
The list above also includes Ai data decision -making company Palantir, whose stocks were irresistible this year, and Oracle, which is expected to benefit from its AI cloud business. In the last quarter of the Oracle, the management said the company had more than $ 450 billion to fulfill its revenue liabilities.
The list also includes some old online players, such as Cisco and IBM, which have benefits from AI, but whose stories are not as interesting as Nvidia, Microsoft and Palantir.
For $ 50,000 investment to make it $ 1 million. USD, VGT should experience a significant assessment and rise 20x from the current level. Remember that the ETF has increased by more than 1,400%over the last two decades, which is certainly not to smell. Many investors believe that Ai is still in early eateries and, while they can be correct, the majority of this ETF – NVIDIA, Microsoft and Apple – has already reached a certain critical mass.
NVIDIA is now the largest share of the shares in the world as the top limit of the market with a top limit of almost $ 4.3 trillion. Microsoft has a $ 3.85 trillion -worthy market -worthy market and Apple has a $ 3.64 trillion market. Thus, to increase double value, these stocks must rise to the giant top boundaries of the market. Over time, when companies become higher, with the same income and income growth, and to indicate the same high repeat, it becomes harder as their common market is matured. August At the end of the 19th century, VGT traded 39 times higher than income and the income growth rate was approximately 32%.
This does not mean that it will not continue to go to more sectors and large and small businesses, but I think 20X’s return from here can be a noble goal. It will take at least a few decades. Good news is that the longer you follow the shares or ETF, the less likely you are to lose money. Investors can continue to buy VGT and should be able to get a good long -term return. However, they should also understand that the road may be uneven. That is why I would recommend an average of dollars to explain your expenditure base over time.
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Bram Berkowitz has no position in any of the above shares. The Motley Fool has positions and recommends advanced micro devices, Apple, Cisco Systems, International Business Machines, Microsoft, NVIDIA, Oracle, Palantir Technologies and Salesforce. The Motley Fool recommends Broadcom and recommends the following options: 2026. January 395 USD calls Microsoft and briefly 2026. January $ 405 Microsoft calls. The Motley fool has a disclosure policy.
Can $ 50,000 investment in this Vanguard AI ETF turning into a million? initially released by The Motley Fool
