A massive artificial intelligence (AI) infrastructure buildout is underway across the world today.
James Gerrish from Shaw and Partners says Amazon, Microsoft, Google parent, Alphabet, and Facebook parent, Meta Platforms, are the hyperscalers of AI, and they plan to spend a combined $725 billion on AI development this year alone.
In a recent Market Matters newsletter, Gerrish said:
All four companies appear to be following the same narrative – the cost of falling behind in AI is greater than the risk of overspending.
Gerrish noted that 70% to 75% of this capex spending was going to AI infrastructure.
AI infrastructure includes GPUs, custom silicon, data centres, networking, and the energy and cooling systems required to run them.
This is a clear shift beyond traditional cloud computing capex, Gerrish said.
Gerrish provided an assessment and guidance on three ASX exchange-traded funds (ETFs) with exposure to the AI infrastructure buildout.
Here are his thoughts.
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Global X Semiconductor ETF (ASX: SEMI)
The ASX SEMI is $35.47 apiece, down 2.3% on Tuesday and up 51% in the year to date (YTD).
Semiconductors control electrical currents in devices like computer chips and smartphones.
Gerrish said:
In simple terms, no AI model gets trained, no data centre gets built, and no smart device gets made without the chips SEMI's holdings produce, making it the most direct play on the raw computing power driving the entire AI buildout.
If the AI buildout continues to accelerate, this is where the capex flows first.
The ETF holds 31 global stocks, with more than 60% exposure to US names, positioning it at the pointy end of the AI infrastructure cycle.
It has already delivered ~36% in 2026, and we see scope for further upside, provided hyperscaler spending remains robust.
The world's biggest semiconductor manufacturer, Taiwan Semiconductor Manufacturing Company, and semiconductor designers Broadcom and Nvidia are among this ETF's largest holdings.
In terms of a buy-in price, Gerrish said he was bullish on this ASX ETF at about $31 apiece:
We like the SEMI ETF through 2026, but from a risk/reward perspective, would leave some flexibility to add into the next ~$3-4 pullback.
VanEck FTSE Global Infrastructure (Hedged) ETF (ASX: IFRA)
IFRA ETF is $25.19 apiece, up 1.2% today and up 8% YTD.
Gerrish said:
The IFRA ETF gives ASX investors diversified exposure to the world's essential infrastructure operators, electric utilities, toll roads, pipelines, airports and rail networks across developed markets.
It can be considered the boring backbone of the AI buildout, with every data centre needing a power grid, and IFRA owns the companies that run them.
However, the returns over the last year haven't been particularly boring, with the ETF up more than +16%.
The ETF holds about 150 stocks with more than 70% exposure to the US and Canada.
The ASX ETF's top holding is Australian toll road operator Transurban Group (ASX: TCL).
Gerrish added:
It's arguably less sexy than the pure AI plays, but increasingly relevant, data centres require enormous amounts of electricity, cooling, and physical construction.
The more AI adoption accelerates, the more demand rises for the heavy industries that support it.
For good measure, the ETF is also forecast to yield almost 3% over the coming 12-months.
Gerrish said he is bullish and 'long' on this ASX ETF, and it is held in the Market Matters' Core ETF portfolio.
Global X Artificial Intelligence Infrastructure ETF (ASX: AINF)
AINF ETF is $17.44 apiece, down 2.5% today and up 17% YTD.
Gerrish said:
AINF arguably offers the purest exposure among the four ETFs looked at today, providing targeted access to the physical backbone of AI, spanning energy, data and materials infrastructure.
This includes copper and uranium producers, utilities and engineering firms, effectively everything required to build and power the data centres underpinning AI's global expansion.
Only launched in April 2025, the AINF was the first ASX-listed fund targeting the physical buildout of AI, and it has delivered a strong ~20% return in 2026.
The AINF ETF invests in 31 stocks with about 50% exposure to the US market.
The largest positions are Delta Electronics Inc, GE Vernova Inc, and Vertiv Holdings Co.
In terms of value, Gerrish said he was bullish on this ASX ETF below $18:
We like this ETF moving forward, but from a risk/reward perspective, we would leave room to average into dips below $17.
