That is no longer the case. Today, ASX exchange traded funds (ETFs) provide simple access to global markets, allowing investors to build international exposure with a single trade.

Here are three ETFs that make global investing straightforward.

VanEck Morningstar International Wide Moat ETF (ASX: GOAT)

The first ASX ETF to consider is the VanEck Morningstar International Wide Moat ETF.

This ETF provides exposure to a diversified portfolio of international companies that analysts believe have sustainable competitive advantages. These are often referred to as wide moats.

It also incorporates a valuation focus, targeting stocks that are considered attractively priced.

Its holdings include names such as Etsy (NASDAQ: ETSY), Edenred, and Symrise AG (ETR: SY1).

Etsy is a useful example of the type of business this ETF targets. It operates a global online marketplace focused on handmade and unique goods. The platform benefits from strong network effects, connecting buyers and sellers in a way that can be difficult for competitors to replicate. This type of positioning is what underpins the idea of a moat and supports long-term earnings potential.

By combining quality and valuation, the VanEck Morningstar International Wide Moat ETF offers a structured way to access international companies with durable advantages.

Vanguard MSCI Index International Shares ETF (ASX: VGS)

Another ASX ETF to consider is the popular Vanguard MSCI Index International Shares ETF.

This ETF provides broad exposure to developed markets around the world, including the United States, Europe, and parts of Asia. It is designed to track a large index, giving investors access to a wide range of global companies.

Among its 1,000+ holdings are companies such as Apple (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT), and Nestle (SWX: NESN).

Apple stands out as one of the largest and most influential companies globally. Its ecosystem of devices and services creates recurring revenue and strong customer retention. This helps illustrate the type of large, established businesses that dominate global indices.

Overall, the Vanguard MSCI Index International Shares ETF offers diversification across industries and geographies, making it a straightforward way to gain broad international exposure.

Vanguard All-World ex-US Shares Index ETF (ASX: VEU)

A third ASX ETF to consider for global investing is the Vanguard All-World ex-US Shares Index ETF.

This fund focuses on global markets outside the United States, providing exposure to both developed and emerging economies.

Its 3,800+ holdings include companies such as Taiwan Semiconductor Manufacturing Company (NYSE: TSM), Samsung Electronics, and ASML Holding (NASDAQ: ASML).

Taiwan Semiconductor Manufacturing Company plays a critical role in the global technology supply chain. It manufactures advanced semiconductors used in everything from smartphones to data centres. Its scale and technical expertise have made it a key supplier to many of the world's largest technology companies.

The Vanguard All-World ex-US Shares Index ETF allows investors to complement US-heavy exposures by adding broader global diversification, including regions that are often underrepresented in traditional portfolios.

The post Global investing is easy on the ASX with these ETFs appeared first on The Motley Fool Australia.

AI adoption is scaling rapidly, and it is now being considered a structural growth theme in global equities.

Rising earnings and visible demand

According to the report, the investment in infrastructure required to build, train, and deploy AI systems at scale represents a multi-year capital cycle with visible demand, rising earnings, and strong competitive positions across the supply chain. 

The commercial applications for AI are broad: 

• automating software engineering
• improving ad targeting
• accelerating scientific research
• optimising supply chains
• transforming enterprise workflows. 

Deploying these systems at scale requires substantial infrastructure, spanning advanced semiconductors, hyperscale data centres, high-performance networking, and significant power generation capacity. 

The depth of this capital requirement, combined with the breadth of end-market demand, is what makes AI a structural rather than cyclical investment theme.

The pillars supporting AI infrastructure

Canaccord said that adoption and monetisation are accelerating. 

Data shows ChatGPT reached 900 million weekly active users in February 2026 – a 350% increase in 18 months. 

AI adoption has moved well beyond  early experimentation. Revenue has followed. Enterprise generative AI spending surged from approximately US$11.5 billion in 2024 to May-24 US$37 billion in 2025, a threefold increase.

At the same time, falling AI costs are accelerating demand and valuations have de-rated while earnings revisions remain positive. 

The pullback in AI-linked equities over the past six months has compressed valuations to levels where the market appears to be pricing in deceleration risk. 

What should investors be targeting?

Canaccord's preferred exposure is to AI semiconductors and capital equipment. 

It listed 6 stocks for AI themed exposure: 

• Amazon (NASDAQ: AMZN)
• ASML (NASDAQ: ASML)
• Broadcom (NASDAQ: AVGO)
• Microsoft (NASDAQ: MSFT)
• Nvidia (NASDAQ: NVDA)
• Taiwan Semiconductor Manufacturing (NYSE: TSM). 

NVIDIA dominates AI-training GPUs, Broadcom leads custom silicon design, TSMC fabricates the leading edge chips both depend on, and ASML holds a monopoly in the lithography systems underpinning advanced production. 

Amazon and Microsoft offer the largest and most profitable cloud platforms, where AI workloads are driving revenue reacceleration and backlog growth.

For investors looking to basket these companies together, Canaccord pointed towards the Global X Semiconductor ETF (ASX: SEMI). 

The report said SEMI is the most accessible option for Australian-based investors: ASX-listed in Australian dollars, across the 30 largest global semiconductor companies, with meaningful weight in TSMC, ASML, Nvidia, and Broadcom.

However it did note that no single ETF isolates the combination of semiconductors and selective hyperscalers from the report. 

The post How to invest in the AI Build-Out: Expert appeared first on The Motley Fool Australia.

Right now, that appears to be technology.

After a strong run, many tech names have pulled back amid concerns around interest rates and how artificial intelligence might reshape parts of the industry. That shift in sentiment has made the space feel more uncertain in the short term.

But it has also made it more interesting.

If I were looking for a single exchange-traded fund (ETF) to gain exposure to that uncertainty, while still backing the long-term opportunity, one fund that stands out to me is the Vanguard Global Technology Index ETF (ASX: VTEK).

A different way to think about tech exposure

When people think about investing in technology, the focus is often on a handful of well-known US stocks like Apple, Microsoft, Nvidia, Meta Platforms.

But the reality is more complex than that. Technology is not just about the platforms we use every day. It is also about the infrastructure that powers them, the chips that run them, and the systems that connect everything together.

That is where the VTEK ETF feels a little different.

It provides exposure to a broad group of around 300 global technology companies, spanning everything from software and cloud computing to semiconductors and advanced manufacturing. This includes ASML, Broadcom, Taiwan Semiconductor, and Shopify.

For me, that wider lens matters. It means you are not relying on one specific trend or trying to pick the next winner. Instead, you are backing the ecosystem as a whole.

The selloff could be doing the heavy lifting

One of the challenges with investing in technology is valuation. When sentiment is strong, it can be difficult to justify buying in at elevated prices.

That is why periods like this can be useful. The recent pullback has taken some of the heat out of the sector. It does not mean tech is suddenly cheap across the board, but it does mean expectations have come down.

I think that shift can be important. Lower expectations can make it easier for companies to surprise on the upside over time, particularly if underlying demand continues to grow.

Not just a US story

Another aspect I like about the VTEK ETF is that it is not solely focused on the United States. While US companies still play a major role, the fund also includes technology leaders from Europe and Asia.

That matters because innovation is not confined to one region.

Semiconductor manufacturing, for example, is heavily concentrated in parts of Asia, while specialised equipment and advanced engineering often come from Europe.

By spreading exposure across regions, I think this Vanguard ETF better reflects how the global technology landscape actually works.

It will not be a smooth ride

That said, this is not a low-volatility investment. Technology shares can move sharply, particularly when interest rates are rising or sentiment turns cautious.

This ETF is designed for growth, which means it is likely to experience ups and downs along the way.

For me, the key is being comfortable with that. If you are investing in this space, it needs to be with a long-term mindset.

Foolish takeaway

Calling any single Vanguard ETF the best is always a stretch. Different investors will have different goals, and what works for one person may not suit another.

But I do think the VTEK ETF makes a strong case right now. It offers broad exposure to the global technology sector, captures multiple layers of innovation, and comes at a time when sentiment has cooled.

For investors who believe in the long-term role of technology in the global economy, I think it is an ETF that is well worth a closer look.

The post Is this the best Vanguard ETF money can buy right now? appeared first on The Motley Fool Australia.

With more than $8 billion in assets under management, QUAL is currently the fifth most popular ASX ETF on our markets. It comes in behind the Vanguard Australian Shares Index ETF (ASX: VAS), the Vanguard MSCI Index International Shares ETF (ASX: VGS), the iShares S&P 500 ETF (ASX: IVV) and the BetaShares Australia 200 ETF (ASX: A200).

Unlike those four ETFs, though, QUAL isn't a market-wide index fund that blindly invests in companies according to their market capitalisation, with few other considerations.

Instead, it tracks an index that actively screens companies to identify their quality. These screens include factors like a stock's return on equity, earnings stability and financial leverage.

After applying these screens to a range of internationally listed shares, the VanEck International Quality ETF settles on a portfolio of around 300 different stocks, hailing from more than a dozen different countries. These countries range from Switzerland, Japan and the United Kingdom to China, Denmark and Ireland.

However, the vast majority of QUAL's portfolio is drawn from the United States of America, which commands more than three-quarters of this ETF's weighted holdings.

So, let's get into what you're actually buying when purchasing QUAL units in 2026.

QUAL: What's in this ASX ETF's box?

Here are the current top ten holdings of the VanEck International Quality ETF, as well as their respective weightings in the QUAL portfolio:

1. Alphabet Inc (NASDAQ: GOOG)(NASDAQ: GOOGL) at 5.67% of the total QUAL portfolio
2. Meta Platforms Inc (NASDAQ: META) at 5.02%
3. NVIDIA Corporation (NASDAQ: NVDA) at 4.64%
4. Apple Inc (NASDAQ: AAPL) at 4.62%
5. Microsoft Corporation (NASDAQ: MSFT) at 4.46%
6. Eli Lilly & Co (NYSE: LLY) at 3.44%
7. Visa Inc (NYSE: V) at 2.92%
8. ASML Holding N.V. (AMS: ASML) at 2.52%
9. Johnson & Johnson (NYSE: JNJ) at 1.86%
10. Walmart Inc (NYSE: WMT) at 1.77%

Some other significant QUAL holdings include Mastercard Inc (NYSE: MA), Netflix Inc (NASDAQ: NFLX), Costco Wholesale Corp (NASDAQ: COST) and Caterpillar Inc (NYSE: CAT).

Not only does this list reveal how dominant the US is in this ASX ETF, but it shows how similar its holdings are to a broad-market US index fund like the iShares S&P 500 ETF. We discussed that ETF just the other day, so check out how its holdings compare to QUAL's here.

This methodology seems to have worked quite well for the VanEck International Quality ETF, though. As of 31 December, QUAL units have returned an average of 14.8% per annum over the past ten years, and 22.85% per annum over the past three. It will be interesting to see if this performance keeps up in 2026.

This ASX ETF charges a management fee of 0.4% per annum.

The post Investing in the VanEck International Quality ETF (QUAL)? Here's what you're really buying appeared first on The Motley Fool Australia.

A 20-year investing horizon gives compounding the freedom to work its magic, smoothing out the bumps and capturing the long-run performance of global markets.

The good news for Australian investors is that the ASX offers world-class ETFs that provide instant diversification across many of the most innovative stocks and strongest economies on the planet.

If you're looking to set up a portfolio you won't need to tinker with for a very long time, the following three ASX ETFs are hard to beat.

iShares S&P 500 ETF (ASX: IVV)

When it comes to long-term wealth creation, it is hard to look beyond the US market.

The iShares S&P 500 ETF tracks the S&P 500 index, giving investors a slice of America's 500 largest stocks. These are the businesses driving innovation in technology, healthcare, consumer spending, and industrials.

This includes giants such as Microsoft (NASDAQ: MSFT), Nvidia (NASDAQ: NVDA), Amazon (NASDAQ: AMZN), Alphabet (NASDAQ: GOOGL), Tesla (NASDAQ: TSLA), and Walmart (NYSE: WMT). These companies have shaped global consumer behaviour, created new industries, and consistently reinvested into product development and growth. For a 20-year investment horizon, it is arguably a must-have building block.

Betashares India Quality ETF (ASX: IIND)

India is increasingly being viewed as one of the world's most exciting long-term economic growth stories. With a young population, a rapidly expanding middle class, modernising infrastructure, and booming digital adoption, the country is expected to be one of the fastest-growing major economies for decades.

The Betashares India Quality ETF focuses specifically on high-quality Indian companies with strong fundamentals. Its portfolio includes leading names such as Infosys (NYSE: INFY), Tata Consultancy Services (NSEI: TCS), and HDFC Bank (NSEI: HDFCBANK). These are businesses benefitting from both domestic expansion and the global outsourcing boom.

India is still early in its economic development cycle compared to Western markets, meaning its long-term runway could be significantly larger. For Australian investors wanting emerging-market growth without taking on excessive risk, this fund offers a blend of quality, diversification, and future upside. It was recently named as one to consider buying by analysts at Betashares.

Betashares Global Shares Ex-US ETF (ASX: EXUS)

If you have your US exposure sorted, then it could be worth looking at the new Betashares Global Shares Ex-US ETF.

This ASX ETF gives investors exposure to more than 900 large and mid-cap stocks across 22 developed markets outside the US and Australia.

Its top holdings include ASML (NASDAQ: ASML), Roche (SWX: ROG), AstraZeneca (LSE: AZN), Nestlé (SWX: NESN), and SAP (ETR: SAP). These are global leaders in semiconductors, pharmaceuticals, consumer goods, and enterprise software.

This fund balances a long-term portfolio by reducing concentration in American technology stocks and increasing exposure to financials, industrials, healthcare, and consumer defensives. It was also recently named as one to consider buying by the fund manager.

The post The best ASX ETFs to buy and hold for 20 years appeared first on The Motley Fool Australia.

Quantum computing is less a machine than a mission -- a team of scouts sent to explore a landscape too complex to map by sight. Each scout sets out along a different path, testing what's possible in parallel. Together, they can sense many routes at once -- that's the genius of the approach. 

The challenge is keeping the team in contact. The radios crackle, the maps blur, and even a shift in weather can scatter their signals. These scouts -- qubits -- are astonishingly sensitive. They can explore multiple directions simultaneously, but the hardware carrying them is still too fragile for the conditions. A breath of heat or a tremor of noise can throw the expedition off course.

So instead of racing ahead, researchers spend most of their time stabilizing the mission: fixing equipment, recalibrating coordinates, and rerunning lost trails. The frontier remains open, but progress comes in slow, careful steps. That patience has defined the field -- until now. And suddenly, the rhythm changed.

A new command post

At its recent D.C. conference, Nvidia (NASDAQ: NVDA) unveiled technology that could quicken that pace. Its new hybrid system -- NVQLink and CUDA-Q -- acts like a central command post for the scouts. It doesn't ease the terrain, but it strengthens communication.

NVQLink connects quantum processors (the scouts) with today's computing systems (the analysts) at microsecond speed -- orders of magnitude faster than before. CUDA-Q, Nvidia's open-source software layer, lets researchers choreograph that link -- running AI models, quantum algorithms, and error-correction routines together as one system. That jump allows artificial intelligence to monitor the expedition in real time, learning the patterns of interference and correcting them before the team drifts apart. 

Why would Nvidia care so much about a field still years from profit? Because whoever builds the bridge first controls the traffic that follows.

It's the difference between reviewing the map after every failed trip and guiding the scouts live as they move. For researchers, that means hundreds of new iterations where there used to be one -- a genuine acceleration of discovery. It's the quiet kind of progress engineers love -- invisible, but indispensable.

Owning the bridge between today and tomorrow

Nvidia didn't build new scouts; it built the infrastructure that keeps them coordinated. Its GPUs (graphics processing units) are already tuned for the dense, parallel calculations these explorations demand, making them the natural partner for any emerging quantum processor.

And that partnership matters. Nvidia's GPUs remain the most widely used AI chips available today, refined by two decades of iteration and supported by the industry's most mature software stack. The CUDA platform gives developers fine-grained control -- the ability to tune workloads, manage memory, and orchestrate timing with precision. That precision is what gives researchers trust; each improvement in control becomes a new kind of progress. In the context of quantum research, that means any new quantum chip can be optimized alongside the fastest general-purpose GPUs on the planet.

Other companies chase better quantum hardware -- superconducting, photonic, trapped-ion -- but all of them need reliable coordination with the computing power we already have. By offering that link, Nvidia turns its GPU ecosystem into the operating environment of hybrid computing, the connective tissue between what exists now and what's coming next.

And because the system is open, every new lab or start-up that connects strengthens Nvidia's position as the default hub for quantum experimentation.

The horizon these scouts are chasing isn't abstract. It's the kind of problem today's computers stumble over -- predicting the behavior of a turbulent atmosphere before a storm forms, modeling molecules to design safer drugs, simulating new materials that could store clean energy or filter carbon from air. Each of those challenges involves trillions of interacting possibilities. Quantum systems, in theory, can explore those possibilities in parallel, finding patterns that would take current technology decades or centuries to compute. Nvidia's faster link doesn't solve those mysteries yet -- it simply means the explorers can search more of the map each day.

Strategic patience

There's also a defensive wisdom in this move. If quantum computing ever matures, it could threaten the same data center model that built Nvidia's empire. CEO Jensen Huang seems intent on making sure that, if the future shifts, Nvidia already sits at its center.

By owning the bridge between today's technology and tomorrow's, the company ensures it earns relevance -- and revenue -- no matter which computing model dominates. Quantum's maturity may still be years away. But the learning curve just steepened -- and Nvidia holds the compass.

The quiet beneficiaries

Even the best explorers need suppliers. Quantum computing's next leap won't come from a single breakthrough, but from the infrastructure that lets quantum and AI work side by side. The companies that stand to benefit first are those already essential to Nvidia's hardware stack -- firms positioned where quantum meets GPU.

TSMC: The fabrication anchor

Every Nvidia GPU and NVQLink controller originates from Taiwan Semiconductor Manufacturing Comany's (NYSE: TSM) leading-edge nodes. Hybrid systems only deepen that reliance through advanced packaging and interconnect design.

No other foundry matches TSMC's yields or scale; hybrid compute extends its dominance.

Micron: The bandwidth supplier

Hybrid workloads move immense volumes of data between GPUs and quantum controllers. Micron's (NASDAQ: MU) high-speed memory powers the data flow that keeps those systems responsive.

Micron is the only U.S.-based memory manufacturer directly supporting government-backed efforts to build the public-sector half of the hybrid-quantum ecosystem.

What today's high-speed memory does is keep the conversation alive around that fragile state -- the AI models, calibration maps, and feedback loops that tell the qubits what to do next. And as we venture further into the unknown, we'll need a great deal more of it to keep that dialogue going.

Broadcom: The interconnect enabler

Broadcom's (NASDAQ: AVGO) networking and optical interconnects provide the ultra-low-latency backbone that NVQLink depends on.

Every AI and future hybrid data center flows through Broadcom's connectivity layer; quantum integration magnifies its role.

Precision, bandwidth, and connection are the quiet trinity of hybrid progress.

ASML: The toolmaker behind precision

ASML's (NASDAQ: ASML) EUV (extreme ultraviolet) lithography powers the control electronics that tie quantum processors -- known as QPUs -- and GPUs together.

There is no replacement for EUV at advanced nodes; hybrid architectures only increase demand for ASML's tools.

For investors, these are the near-term names to watch: companies that already profit from AI infrastructure and now stand to benefit from its quantum extension.

The quiet acceleration

Quantum computing is still a long road. The terrain remains uncertain, the instruments temperamental. But with faster communication and real-time feedback, the scouts can finally move with rhythm instead of hesitation. But for once, the road feels clearly marked.

No one can yet see the full map of this new world. What's changed is how quickly it's being drawn.

And in that quiet acceleration -- not a breakthrough, but a better conversation between explorers -- Nvidia once again found the place where progress hides: in the space between discovery and control.

What this could mean for Nvidia

Nvidia's move isn't about building a quantum computer; it's about owning the bridge every quantum effort will need.

• Near term: No revenue surge, but tighter ties with national labs and deep-tech start-ups.
• Medium term: The CUDA platform becomes the training ground where AI and quantum learn to work together -- a new moat forming quietly around Nvidia's data center dominance.
• Long term: If quantum delivers on climate forecasting, drug discovery, or clean energy materials, Nvidia is positioned to sell the picks, shovels, and maps to every explorer.

In the near term, Nvidia faces no equal hybrid competitor. Long term, IBM and Microsoft are the most credible threats -- one at the hardware-software integration layer, the other at the cloud orchestration layer -- but both are still years from challenging Nvidia's lead in AI-based hybrid compute.

For investors, the takeaway is simple: Quantum remains speculative, but infrastructure usually wins first. Nvidia just made itself indispensable to a field that's still learning to stand -- and that's the kind of patience that compounds.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Nvidia's quiet move into quantum computing could reshape the next frontier of AI appeared first on The Motley Fool Australia.

Since 2022, it has fuelled the S&P 500 Index (SP: .INX) to record high after record high. 

So just how much money are companies and governments pouring into AI?

Earlier this month, OpenAI, (the company behind Chat GPT) signed one of the largest cloud contracts in history with Oracle – $300 billion worth of computing power spread across roughly five years.

Frank Holmes, CEO and chief investment officer of U.S. Global Investors Inc (NASDAQ: GROW), said earlier this week on the rise of AI: 

Last month, Intel made a historic deal with the Trump administration. The government announced it would take an $8.9 billion equity stake in Intel, in addition to billions in CHIPS Act grants. (And just this week, Nvidia said it would be investing $5 billion in the struggling tech firm.)

I believe the message is loud and clear: Semiconductors are strategic assets like oil and critical metals, and Washington is willing to invest taxpayer money to support them.

But let's take a step back. 

What are semiconductors?

A semiconductor is a special type of material that can control electricity – sometimes it lets electricity flow, sometimes it blocks it.

Because of this property, semiconductors are the building blocks of modern electronics. They're used to make microchips, which power everything from your phone to cars to medical devices.

Think of semiconductors as the "brains and nerves" inside electronic devices.

Why are they so vital for artificial intelligence?

Artificial Intelligence (AI) relies on massive amounts of data processing. To run AI models, you need chips that can handle:

• High-speed calculations (processing billions of pieces of information per second).
• Parallel processing (doing many tasks at once).
• Energy efficiency (since AI uses huge amounts of power).

Training and running AI models requires huge numbers of chips and tech giants (NVIDIA, AMD, Intel, TSMC, etc.) are racing to supply them.

Additionally, countries see semiconductors as a strategic resource (like oil in the past). There's heavy investment in domestic chip production. The next breakthroughs in AI depend on smaller, faster, more efficient chips. Whoever leads in semiconductor innovation will likely lead in AI.

If data is the new oil, semiconductors are the mines and refineries that turn it into usable energy for AI.

According to Global X, sector revenue is expected to expand by 38% over 2025-26, supported by hyperscaler investment and the diffusion of AI workloads into various industries.

How do investors gain exposure?

Like any investment theme, you can choose individual companies engaged in this field. 

You could consider investing in blue-chip stocks like:

• Nvidia (NASDAQ: NVDA)
• Taiwan Semiconductor Manufacturing (NYSE: TSM)
• ASML (NASDAQ: ASML)

Another option to gain more diversified exposure is to invest in an ASX ETF that tracks this sector. 

One that has brought strong returns in the past year is Global X Semiconductor ETF (ASX: SEMI). 

The fund focuses on companies that stand to potentially benefit from the broader adoption of tech-enabled devices that require semiconductors. This includes the development and manufacturing of semiconductors.

At the time of writing it has 30 holdings in this sector. 

The post What in the world is a semiconductor and why is it the backbone of artificial intelligence? appeared first on The Motley Fool Australia.

Even professionals don't always get it right, and owning the wrong stock at the wrong time can set your portfolio back years.

The good news is that you don't actually need to pick single stocks to build serious wealth in the share market.

That's where exchange-traded funds (ETFs) come in. With a handful of ASX ETFs, you can gain exposure to hundreds (or even thousands) of the world's best businesses, all while keeping your investing strategy simple.

Start with an Australian core

For local exposure, the Vanguard Australian Shares Index ETF (ASX: VAS) is a natural building block for investors to start with.

It tracks the ASX 300 index, giving you instant ownership of names like BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), and Woolworths Group Ltd (ASX: WOW). That means your portfolio rises and falls with the performance of 300 of Australia's biggest and most established businesses.

Add international diversification

The Australian market makes up less than 2% of global equities, so it is vital to look offshore for investment ideas. The iShares S&P 500 ETF (ASX: IVV) provides exposure to 500 of the largest U.S. stocks, including leaders such as Microsoft (NASDAQ: MSFT), Visa (NYSE: V), and Johnson & Johnson (NYSE: JNJ).

For an even wider net, the Vanguard MSCI Index International Shares ETF (ASX: VGS) spreads your investment across more than 1,200 stocks from developed markets around the globe. That means ownership of everything from ASML Holding (NASDAQ: ASML) in semiconductors to LVMH (FRA: MOH) in luxury goods.

Tilt toward long-term trends

Beyond broad market exposure, thematic ETFs let you target powerful megatrends.

For example, the Betashares Global Robotics and Artificial Intelligence ETF (ASX: RBTZ) gives you access to innovators like Intuitive Surgical (NASDAQ: ISRG) in robotic surgery and Keyence in automation. These are areas expected to reshape industries over the next few decades and could be great long term focuses.

Alternatively, there are the Betashares Global Cybersecurity ETF (ASX: HACK) and the Betashares Crypto Innovators ETF (ASX: HACK) to consider.

Foolish takeaway

By combining core market ETFs with international diversification and exposure to megatrends, you can build a wealth-generating portfolio without ever picking a single stock. It is a strategy that's simple, diversified, and designed to compound steadily over the long term.

For most investors, that's exactly the kind of approach that leads to financial freedom.

The post How to build wealth with ASX ETFs and never pick a single stock appeared first on The Motley Fool Australia.

For those who haven't had a chance to check it out, Nvidia Founder and CEO Jensen Huang showcased the latest developments in artificial intelligence (AI). This included the latest in agentic and generative AI, as well as other exciting developments.

Semiconductors, also known as semis or chips, are found in a wide range of products, including computers, smartphones and gaming hardware. 

According to Global X, the semiconductor industry is positioned for significant growth. The next generation of innovative technology, from large language models (LLMs) to robotics, will require semiconductors to power it. 

PwC expects global semiconductor revenues to grow twice the speed of global GDP, exceeding $1 trillion by 2030.

Not just Nvidia

While Nvidia (NASDAQ: NVDA) has become the poster child for AI, other companies within the AI ecosystem also offer compelling investments. 

For example, ASML Holding NV  (NASDAQ: ASML) manufactures lithography machines, which are fundamental to producing semiconductor chips. This is the most expensive step in the chip-making process, with machines going for north of US$200 million.  ASML is essentially the only player in this field, meaning companies like Nvidia and Apple (NASDAQ: AAPL) have no choice but to buy these machines to maintain their competitive position. This gives ASML incredible pricing power. 

ASML's  technology is also extremely capital intensive and complicated, and therefore difficult to replicate. This means their competitive position is rock solid.

Semiconductor exposure in a single trade

Bullish on the semiconductor industry, but can't pick a winner?

The good news for ASX investors is that they don't have to. They can gain exposure to the semiconductor industry in a single trade without having to pick a winner.

In fact, the ASX-listed exchange-traded fund (ETF) Global X Semiconductor ETF (ASX: SEMI) could be one of the hottest ASX ETFs to own this decade. 

It contains a basket of companies with exposure to the semiconductor industry. While it contains 30 holdings, it is relatively concentrated in its top five positions.

As of 28 February, 2025, these were:

• Taiwan Semiconductor Manufacturing Co Ltd (9.7%)
• Nvidia (9.5%)
• Broadcom (9.2%)
• ASML Holding NV (9.2%)
• Texas Instruments (6.0%)
  
  

Unsurprisingly, 64% of holdings are in the United States, 13% are based in Taiwan, and the remainder are dispersed around the world. 

With SEMI down around 4% over the past month following a broad tech sector sell-off, ASX investors have the chance to buy it now on sale. 

SEMI has enjoyed strong capital growth over the past 5 years, climbing nearly 65%. This follows the AI phenomenon that has captivated investors over the past few years. 

ASX investors can pick up this ETF for a management expense of 0.45%.

The post Bullish about semiconductors? Check out this ASX ETF appeared first on The Motley Fool Australia.

Over the past 10 years, semiconductor equipment manufacturer ASML (NASDAQ: ASML) has been a massive winner, producing a total return of 761% vs. 270% for the S&P 500. But this has been a tough month. Since the company's latest earnings report in mid-October, the stock has dropped 18% -- a reaction to both results and guidance that fell below analysts' expectations.

The post-earnings drop erased almost a year's worth of gains for ASML, returning the share price to where it was in early 2024. The question investors are asking is if this presents a buying opportunity, or if the market's reaction is warranted, considering the financial picture moving forward.

Let's see if ASML is a buy before the stock price recovers.

An indispensable link in the semiconductor supply chain

Semiconductors have been top of mind for investors over the past few years, as the rush toward artificial intelligence (AI) has injected billions of dollars of capital into developing the most leading-edge chips that can power the large language models behind AI chatbots like ChatGPT. While companies like Nvidia have gotten the most headlines, ASML makes the entire chip manufacturing process possible.

To oversimplify, ASML makes the machines that make the chips. When it comes to cutting-edge chip manufacturing, ASML is the only company in the world that makes the extreme ultraviolet lithography machines necessary to make the chips that power the most advanced technology.

Long-term trend or short-term challenge?

The headline results for ASML's third quarter of 2024 were not bad. Year over year, revenue grew by 12% and exceeded the company's guidance, while earnings per share increased by 10%. However, net bookings only increased by 1% to 2.6 billion euros. ASML doesn't provide guidance for bookings, but analysts who cover the company were expecting 5.6 billion euros. Whenever there's that large of a discrepancy between expectations and reality, the stock will often pay the price.

Bookings is an important metric for ASML because it captures all sales for which written authorization has been received. Essentially, it accounts for current revenue, plus revenue it can expect in the future. Management spoke about this on the earnings call, pointing out that market conditions include a customer who is still cautious and slower to make buying decisions. The company expected that 2025 would be the year when they would return to growth, but it now appears that some of the challenges ASML faces will continue into next year.

Investors' patience is wearing thin

The stock reaction would indicate that investors are less willing to wait for this return to growth than they may have been a few weeks ago. However, some context is worth mentioning. At ASML's 2022 investor day, it forecast revenue for 2025 of between 30 billion euros and 40 billion euros. The company now expects that to be in the low end of the range, between 30 billion and 35 billion euros.

Even with slower-than-expected recovery for its customers, revenue in 2025 should still be within a range predicted almost two years ago. This indicates management has pretty good clarity into its business results several years in advance. This is worth keeping an eye on over the next few quarters. If 2025 revenue guidance gets revised down again, it could mean an even longer delay for a return to growth and could lead to another share price fall.

Is ASML a buy?

Long term, it's hard to argue that ASML won't be a more valuable company in the future than it is today. That said, the semiconductor industry is cyclical, so periods where the share price falls should be expected by investors.

Even after the post-earnings decline, ASML's stock still trades for a price-to-earnings (P/E) ratio of 38, which does not appear to be cheap. However, consider where today's valuation compares to the longer-term median P/E ratio.

ASML PE Ratio data by YCharts

The case could be made that, historically, ASML shares are cheaper than they've been in a while. On the other hand, there's enough uncertainty in the coming quarters that it's possible even more attractive buying opportunities could be on the horizon.

Adding to or starting a position at today's price could make sense, but I think ASML is the kind of stock to add to opportunistically over time, as short-term challenges present compelling valuations.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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ASML's (NASDAQ: ASML) stock plummeted 16% on 15 October after it accidentally posted its third-quarter earnings report a day ahead of schedule, and the numbers weren't impressive.

The Dutch semiconductor equipment maker's net sales rose 20% year over year to 7.47 billion euros ($8.14 billion), missing analysts' estimates by 430 million euros. Its net bookings only increased 1% to 2.63 billion euros ($2.86 billion), missing the consensus forecast by a whopping 2.73 billion euros.

ASML's gross margin also declined by 110 basis points year over year to 50.8%. On the bottom line, its earnings rose 10% to 5.28 euros ($5.75) per share but missed analysts' expectations by 0.28 euros.

ASML followed up those grim headline numbers with a disappointing near-term outlook.

It expects revenues to rise 22% to 28% year over year in the fourth quarter but to only rise about 1% to 28 billion euros ($30.5 billion) for the full year. That would represent its slowest full-year growth in nine years.

For 2025, it expects its revenue to grow between 7% and 25% -- compared to its previous outlook for up to 43% growth. Should investors buy, sell, or hold ASML stock after that disappointing earnings report?

Why is ASML's growth cooling off?

ASML's photolithography systems optically etch circuit patterns onto silicon wafers. It's the world's leading manufacturer of deep ultraviolet (DUV) lithography systems, which are used to produce older chips, and the only supplier of extreme ultraviolet (EUV) systems, which are required to produce the world's smallest, densest, and most advanced chips.

A single EUV system costs about $180 million and requires multiple planes to ship, but all of the world's leading chip foundries -- including Taiwan Semiconductor Manufacturing Company (NYSE: TSM), Samsung, and Intel Corp (NASDAQ: INTC) -- use those machines for their high-end chips.

ASML's new "high-NA" EUV systems, which are used to produce even smaller chip traces, currently cost about $380 million.

That's why ASML is widely considered a linchpin and bellwether of the semiconductor market. However, its growth is highly cyclical and tethered to the major chipmakers' upgrade cycles. Tighter export curbs also prevent it from shipping its high-end DUV and EUV systems to mainland China, which accounted for 26% of its net sales in 2023.

From 2020 to 2023, ASML's annual revenue rose by double digits as its gross margins expanded. That growth was driven by higher PC sales throughout the pandemic, new 5G smartphones, and the market's soaring demand for new AI chips.

But in 2024, ASML expects its revenue to stall out as it grapples with the tighter export curbs for Chinese chipmakers, laps the AI market's initial growth spurt, and transitions toward its newer high-NA EUV systems.

That outlook wasn't surprising, but the bulls had expected a stronger recovery in 2025 as it overcame those headwinds and ramped up its high-NA EUV shipments.

However, TSMC only recently ordered its first high-NA EUV systems and isn't in a hurry to replace its existing low-NA EUV systems with those pricier systems.

Intel, which installed its first high-NA EUV systems before TSMC, is now reportedly considering a spin-off or sale of its entire foundry unit -- and those plans could disrupt its orders from ASML. Samsung is only expected to install its first high-NA EUV systems at the end of 2024.

Meanwhile, the rapid growth of the AI market is driving many chipmakers to focus on adding new AI features to their existing chips instead of developing smaller chips. That trend could exacerbate the sluggish adoption of its high-NA EUV systems.

As ASML's top customers adopt conservative high-NA EUV strategies, EU regulators are preventing it from shipping its higher-end systems to China. In other words, it's being cut off from the one market that needs its systems the most.

Is it the right time to buy, hold, or sell ASML stock?

At $730 per share, ASML stock looks reasonably valued at 27 times forward earnings. However, it could remain under pressure until it overcomes its near-term headwinds and its bookings growth accelerates again. So, if you already own ASML stock, it's smarter to simply hold it and ride out the cyclical downturn instead of selling it.

But if you don't own ASML stock yet, I don't think it's the best time to buy it. Its shares could head lower as its top customers postpone their high-NA EUV purchases, the chip market cools off again, and it gets slapped with even tighter trade restrictions in China.

For now, I'd personally prefer to buy more balanced chip plays like TSMC instead of ASML.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Shares of ASML (NASDAQ: ASML) were tumbling today after the leading producer of lithography equipment for semiconductors accidentally published its earnings results ahead of schedule this morning, and disappointed the market with the news.

As a result, the stock was down 16.4% as of 12:01 p.m. ET.

ASML dials back its 2025 forecast

ASML delivered solid results in the third quarter with revenue of 7.47 billion euros, which was equal to $8.14 billion, ahead of estimates at $7.82 billion.

That figure represents 11.2% growth from the quarter a year ago, and 19.6% growth from the second quarter, showing the company is rebounding from an earlier lull in purchases ahead of an expected ramp-up into next year.

The company sold 106 lithography systems in the quarter, up from 89 in the second quarter, and it reported solid growth on the bottom line, as earnings per share (EPS) rose to 5.28 euros, compared to 4.01 euros in the second quarter. That translated into $5.75 in EPS, which compared to $5.27 in the quarter a year ago and beat estimates at $5.33.

CEO Christophe Fouquet said that net sales in the quarter were above guidance, "driven by more DUV [deep ultraviolet machines] and Installed Base Management sales." The installed base management segment mostly refers to service.

However, the company dialled back its forecast for 2025 as Fouquet said:

While there continue to be strong developments and upside potential in AI, other market segments are taking longer to recover. It now appears the recovery is more gradual than previously expected. This is expected to continue in 2025, which is leading to customer cautiousness.

What it means for ASML

That slowdown seems to reflect challenges at customers including Intel and Samsung, who have both slowed their foundry investments recently.

The company guided for revenue of 8.8 billion to 9.2 billion euros in the fourth quarter, but its 2025 forecast of 30 billion to 35 billion euros was below the consensus at 36.3 billion euros.

That forecast understandably disappointed investors, though it reflects market conditions rather than ASML's competitive position. Considering that, this looks like a buying opportunity for patient investors.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

There's been an increased focus on the semiconductor industry since early last year. Investors have been enthusiastic about recent developments in the field of artificial intelligence (AI), which has sparked a flurry of activity in the space.

These powerful algorithms are highly dependent on hardware that features the most advanced processors, which has buoyed much of the sector. However, after a sharp run-up, many AI stocks have been treading water over the past several months as investors have waited for evidence the trend still has room to run.

With that as a backdrop, it's noteworthy that in trading (in the United States) on Thursday, Taiwan Semiconductor Manufacturing (NYSE: TSM) had climbed by 1.9%, ASML Holding (NASDAQ: ASML) had rallied 3.7%, and Indie Semiconductor (NASDAQ: INDI) had jumped 7.4% as of 12:46 p.m. ET.

A check of all the usual suspects -- regulatory filings, financial reports, and changes to analysts' price targets -- turned up nothing in the way of company-specific news to explain those stock price increases. This suggests that investors were reacting to the financial results from another player in the AI revolution, and that the news was good.

A flurry of activity

Micron Technology (NASDAQ: MU) released its fiscal 2024 fourth-quarter report after the closing bell Wednesday, and investors let out a collective cheer.

In the period, which ended Aug. 29, the computer memory specialist's revenue soared 93% year over year to $7.75 billion -- a company record -- while also increasing 14% sequentially. This resulted in adjusted earnings per share (EPS) of $1.18, much improved from its loss of $1.07 per share in the prior-year quarter.

Driving those results was surging demand for high-bandwidth memory of the type used in data centers and AI, which boosted Micron's profit margins.

The results sailed past Wall Street analysts' consensus expectations for revenue of $7.65 billion and adjusted EPS of $1.11.

It wasn't just the robust results that drove the stock higher, as Micron's forecast suggested the growth spurt would continue. For its fiscal 2025 first quarter, management is guiding for revenue of $8.7 billion, which would equate to growth of 84% year over year, and adjusted EPS of $1.74, which would be an increase of 83%.

Management cited strong AI data centre demand in driving sales growth for its DRAM memory and NAND flash-based storage.

The subsequent run-up in other stocks in the chip space suggests that investors view Micron's report as convincing evidence that the demand for AI and the hardware to support it is ongoing. They also clearly view these developments as positive for a broad cross-section of companies in the AI space.

A positive for chipmakers

Micron's robust results should help dispel any notion that demand for AI is waning. It's also not surprising that each of the companies in our trio has a specialty connected to the specific types of semiconductors that will benefit from the growing adoption of AI.

• Taiwan Semiconductor Manufacturing is the world's largest third-party chipmaker. Strong demand for the world's most advanced chips is fueling the foundry's pipeline and strong growth.
• ASML Holding is the only company able to build the advanced lithography systems that chipmakers must use to manufacture the highest-end semiconductors, so it's also benefiting from these secular tailwinds.
• Indie Semiconductor specialises in the types of processors used in automobiles, powering advanced driver-assistance systems, as well as various connected-car and in-cabin systems. It's also developing customized AI solutions for carmakers.

The evidence suggests the accelerating adoption of AI will continue to increase the fortunes of companies in the semiconductor space. It's worth noting, however, that all AI stocks are not created equal.

From a valuation perspective, Taiwan Semiconductor and ASML are inexpensive, selling for 22 times and 25 times forward earnings, respectively. Indie Semiconductor, on the other hand, isn't profitable, making it a much riskier investment.

That said, each of these stocks has intriguing potential, particularly given the continuing opportunities in the AI space.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Despite some concern about a bubble in the artificial intelligence (AI) sector, AI stocks are once again climbing near all-time highs following the US Federal Reserve's decision to lower benchmark interest rates.

One measure of AI stocks, the VanEck Semiconductor ETF, an exchange-traded fund (ETF) that counts Nvidia, Taiwan Semiconductor Manufacturing, and Broadcom as its top three holdings, is up 10% from two weeks ago, though it's still down 16% from its peak in July.

One AI stock, in particular, seems oversold. It is expecting a revenue rebound and has a wide economic moat thanks to its unique product advantages, all of which make it an excellent buy heading into the new year.

I'm talking about ASML (NASDAQ: ASML), the leading maker of lithography systems -- machines that use light to make semiconductors.

What is ASML?

ASML is a Dutch company that was founded in 1984 as a joint venture between the electronics company Philips and Advanced Semiconductor Materials International (ASMI), a manufacturer of chipmaking machines.

After several decades of innovation, rollout of new products, and acquisitions, ASML is the clear leader in lithography systems today. It introduced its first prototype of an extreme ultraviolet (EUV) machine in 2010. This machine uses a shorter wavelength, allowing for smaller chip features that make it faster and more powerful.

The EUV machines have become the state-of-the-art industry standard for semiconductor production, but ASML is still the only company that manufactures them. It does have competitors that make less advanced deep ultraviolet machines (DUV).

That gives ASML a wide economic moat as the EUV machines are very expensive to make, and the company has unmatched intellectual property, a long history of research and development, and key supplier and customer relationships in the industry. ASML spent 20 years developing the technology, working with suppliers and partners to do so.

The machines are highly complex, containing around 100,000 parts, and shipping them requires dozens of freight containers and trucks, as well as three cargo planes. In a typical quarter, ASML sells a small number of these very expensive machines. In the second quarter, it sold 100 lithography systems.

Where ASML stands today

Thanks to its dominance of its industry, ASML has built a formidable business, on track for more than $30 billion in revenue this year, and it's highly profitable with an operating margin that has hovered around 30% in recent years.

However, the company does face challenges. The industry is emerging from a cyclical downturn after revenue jumped in 2023, and management has said that 2024 will be a transition year, as it expects strong demand to return in 2025.

Separately, the intensifying tech cold war with China has also impacted the business. In response to US demands, the Dutch government has restricted ASML from exporting its most advanced systems to China, which could impact its revenue.

Why the stock is a buy before 2025

Sluggish growth in recent quarters, concerns about China, and worries about a broader bubble in AI have all weighed on the stock since its peak in July. ASML is down 28% since then.

However, looking ahead to 2025, the future looks much brighter as the company expects strong sales growth next year, noting secular growth in key semiconductor end markets like green energy, electrification, and new applications.

Additionally, the foundry industry is on the verge of a construction boom as a number of chip stocks like TSMC, Samsung, and Intel are planning to open new fabs to accommodate skyrocketing demand for semiconductors in the AI era. That should ensure a bright future for ASML over the next five years as it faces no competition in EUV machines.

While its earnings are currently suppressed because of the cyclical slowdown, the stock trades at a forward P/E of just 24 based on 2025 earnings estimates. Considering ASML's competitive advantages and future growth opportunities, the stock looks like a steal at that valuation.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Not only did it send investors scrambling for potential winners from the artificial intelligence (AI) race, mainstream society was pondering what sort of implications the technology would have on jobs and ethics.

Now, 12 months later, it's clear one of the massive winners was Nvidia Corp (NASDAQ: NVDA) and its shareholders.

Incredibly for a 30-year-old company, the stock price has soared almost 250% this year.

So if you're now looking to invest in AI, is it already too expensive?

Probably.

There are certainly other tech shares I can see that have similar associations to AI but have less demanding valuations.

Let's check out one of those:

Picks and shovels

One thing investors need to be clear on about Nvidia is that the company itself doesn't produce artificial intelligence.

Rather, it makes the powerful computer chips that are necessary to run AI software.

It's a typical "picks and shovels" story, where the guy selling the spades makes more money than most of the miners looking for gold.

Did you know there is a mob over in the Netherlands who are supplying the picks and shovels to the picks and shovels makers?

ASML Holding NV (NASDAQ: ASML) provides extreme ultraviolet (EUV) and deep ultraviolet (DUV) lithography machines that the computer chip makers need to print tiny patterns onto chips.

The Dutch company has a monopoly on this technology, especially for high-power computer processors that require nanoscopic etchings.

The Motley Fool US tech expert Keithen Drury explains it best:

"The latest and greatest in chip design is a 3nm chip, which means the distance between transistors is at a minimum of 3nm wide. For reference, a human hair is between 80,000 and 100,000 nanometers wide.

"While only a handful of companies can manufacture 3nm chips, only one creates the machines that make this technology possible: ASML."

And this is why I think ASML makes a great long-term investment for the AI revolution.

This AI stock is cheaper than Nvidia

Although the ASML share price has risen a chunky 35% this year, it hasn't exploded to the extent of Nvidia, making the stock decent value for those buying now.

Drury noted how ASML shares are currently "undervalued", as they currently trade "well below their five-year historical average PE ratio".

Over the past five years, the ASML stock price has increased five-fold.

One risk to note is any escalation in geopolitical tensions with China.

Already Europe and the US are restricting export of certain technologies to the Asian giant, based on security concerns.

ASML has a large customer base in China, according to Drury, and any further political restrictions could jeopardise the company's growth.

"There is always a possibility that ASML may be prohibited from exporting any of its products to China, which would be an issue, as 46% of ASML's Q3 and 24% of Q2's new machine sales came from China."

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