The One AI ETF to Buy in 2025: Why Global X's AIQ is Still a Winner

In a year marked by volatility and rising tariffs, investors seeking exposure to artificial intelligence must navigate a landscape where short-term headwinds clash with long-term promise. Amid this turbulence, one ETF stands out as a compelling choice for 2025: the Global X Artificial Intelligence & Technology ETF (AIQ). Here’s why it deserves a spot in your portfolio.

Why AIQ Dominates the AI ETF Space

AIQ is the largest dedicated AI ETF globally, with $2.658 billion in assets under management (AUM). Its 35.22% one-year return as of April 2025 outpaces peers like the Invesco AI and Next Gen Software ETF (IGPT), which delivered 29.58% over the same period. While its year-to-date (YTD) performance of -12.27% reflects broader market pressures—such as U.S. tariffs on Taiwan Semiconductor and fears of a recession—the fund’s long-term track record underscores its resilience.

Key Advantages of AIQ:

1. Global Diversification: AIQ holds 85 companies worldwide, including giants like Alibaba (BABA) and Tencent (TCEHY) in China, as well as U.S. leaders like NVIDIA (NVDA) and Alphabet (GOOGL). This spread mitigates reliance on any single market.
2. Forward-Thinking Index: It tracks the Indxx Artificial Intelligence & Big Data Index, which screens firms for their AI revenue streams and innovation.
3. Cost Efficiency: With an expense ratio of 0.68%, AIQ is competitive among peers, though slightly higher than XAIX’s 0.35%.

Navigating Near-Term Challenges

The fund’s YTD decline reflects macroeconomic headwinds. For instance, U.S. tariffs on Taiwanese semiconductor exports—critical to AI hardware—have inflated costs for firms like Taiwan Semiconductor Manufacturing (TSM), a key supplier to AI chipmakers. Meanwhile, investors are demanding clearer return on investment (ROI) metrics for companies with high AI capital expenditures.

Yet these hurdles are not unique to AIQ. The Global X Robotics & Artificial Intelligence ETF (BOTZ), for example, saw a -16.68% YTD return, yet its 7.26% one-year gain highlights the sector’s uneven but persistent growth.

Why the Long-Term Outlook Remains Bright

Experts emphasize that AI’s disruptive potential—from healthcare diagnostics to autonomous systems—remains intact. Consider the rise of generative AI tools like those from Microsoft (MSFT) and Amazon (AMZN), which are redefining industries. AIQ’s exposure to robotics, big data, and semiconductors positions it to capture this upside.

The Case for AIQ Over Alternatives

While other ETFs offer niche benefits—such as the Xtrackers AI ETF (XAIX)’s low 0.35% expense ratio or Roundhill’s CHAT’s active management—none match AIQ’s scale and diversification. Even the smaller VistaShares AIS ETF ($8.6M AUM) struggles to compete with AIQ’s liquidity and global footprint.

Final Analysis: A Buy at $30?

At a price of $30 per share, AIQ offers entry into a fund that’s already delivered 35.22% gains in 12 months. Historically, AIQ has shown resilience: during the 2022 market downturn, it rebounded sharply as AI adoption accelerated. Today, with valuations lower than early 2024, it presents a contrarian opportunity.

Final Recommendation

Investors should allocate to AIQ as a core holding in their tech portfolios, pairing it with broader market ETFs like the SPDR S&P 500 ETF (SPY) for balance. While near-term volatility persists, AIQ’s global diversification, strong thematic focus, and proven long-term returns make it the clear “no-brainer” pick for 2025.

In a sector where patience pays, AIQ’s track record and strategic positioning ensure it remains at the forefront of the AI revolution.

Disclosure: This analysis is for informational purposes only and does not constitute financial advice. Always consult a professional before making investment decisions.