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.

This isn't about picking a single winner. It's about spreading bets across global growth engines and letting time do the heavy lifting.

Here's where I'd put $500 each.

Vanguard FTSE Asia Ex-Japan Shares Index ETF (ASX: VAE)

The Vanguard FTSE Asia Ex-Japan Shares Index ETF gives exposure to one of the most important long-term growth regions in the world.

This ETF invests across Asia excluding Japan, with meaningful weightings to China, Taiwan, India, South Korea, and Hong Kong. These markets are home to globally significant companies and industries, including semiconductors, financial services, ecommerce, and infrastructure.

What I like about allocating a modest amount here is diversification. Asian economies don't always move in sync with Australia or the US, and long-term growth rates in parts of the region remain structurally higher. It can be volatile at times, but as a long-term allocation, I think Asia deserves a seat at the table.

Putting $500 into the VAE ETF feels like a sensible way to tap into that growth without taking on single-country risk.

Vanguard FTSE Europe Shares ETF (ASX: VEQ)

The Vanguard FTSE Europe Shares ETF is a region many investors overlook, but I think it's worth considering.

European equities tend to trade at more conservative valuations than US markets and offer exposure to world-class global businesses across healthcare, consumer goods, industrials, and financials. These are companies that generate revenue globally, not just within Europe.

The VEQ ETF provides broad exposure across developed European markets, which helps smooth out country-specific risks. It's not the fastest-growing region in the world, but it does offer diversification and a different return profile to US-heavy portfolios.

For me, allocating $500 here would be about balance. It reduces reliance on a single market and adds exposure to high-quality global operators at reasonable valuations.

iShares Global 100 AUD ETF (ASX: IOO)

The iShares Global 100 AUD ETF is the ETF I'd choose for simple, concentrated exposure to the world's largest and most influential companies.

The IOO ETF tracks the S&P Global 100 Index, which includes 100 multinational blue-chip businesses that dominate their industries. Its top holdings read like a who's who of global corporate powerhouses, including NVIDIA, Apple, Microsoft, Amazon, Alphabet, Broadcom, JPMorgan Chase, Eli Lilly, and Exxon Mobil.

What appeals to me here is clarity. You know exactly what you're getting. These are companies with scale, pricing power, and global reach. They're not early-stage growth stories, but they've proven their ability to generate cash flow and compound earnings over time.

As a long-term holding, the IOO ETF provides instant access to global leaders across technology, healthcare, energy, and financials, all in a single trade.

Foolish takeaway

If I were investing $1,500 today, I'd be very comfortable spreading $500 each across the Vanguard FTSE Asia Ex-Japan Shares Index ETF, the Vanguard FTSE Europe Shares ETF, and the iShares Global 100 AUD ETF.

Together, they offer exposure to emerging growth in Asia, established global businesses in Europe, and the world's largest blue-chip companies. It's not about perfection. It's about sensible diversification, global reach, and staying invested for the long term.

The post Why I would invest $500 in each of these ASX ETFs appeared first on The Motley Fool Australia.

The good news is that exchange-traded funds (ETFs) remove much of that pressure and offer a simple way to invest.

With a single investment, you can gain instant diversification and exposure to hundreds or even thousands of companies.

For Australians starting their investing journey in 2026, here are five ASX ETFs that stand out as sensible, beginner-friendly options.

Vanguard Australian Shares ETF (ASX: VAS)

The Vanguard Australian Shares ETF is often considered a cornerstone ETF for local investors. It provides exposure to the 300 largest shares listed on the ASX, making it an easy way to invest in the Australian economy as a whole.

Its portfolio includes blue-chip names such as BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), CSL Ltd (ASX: CSL), and Wesfarmers Ltd (ASX: WES). For beginners, this fund offers simplicity, diversification, and a steady stream of income over time.

iShares S&P 500 ETF (ASX: IVV)

If you want global exposure without complexity, the popular iShares S&P 500 ETF is a strong place to start. It tracks the S&P 500 Index, giving investors access to 500 of the largest stocks in the United States.

Holdings include Microsoft Corp (NASDAQ: MSFT), Apple (NASDAQ: AAPL), NVIDIA Corp (NASDAQ: NVDA), Johnson & Johnson (NYSE: JNJ), and Visa Inc (NYSE: V). For beginners, this fund offers exposure to some of the world's most profitable businesses with a single, low-cost investment.

Vanguard MSCI Index International Shares ETF (ASX: VGS)

The Vanguard MSCI Index International Shares ETF could be worth considering. It is designed for investors who want broad international diversification beyond Australia. It invests across developed markets such as the United States, Europe, and Japan.

Its holdings include companies like Alphabet Inc (NASDAQ: GOOGL), Nestlé (SWX: NESN), Toyota Motor Corp (TYO: 7203), and LVMH Moët Hennessy Louis Vuitton (FRA: MOH).

Betashares Australian Quality ETF (ASX: AQLT)

The Betashares Australian Quality ETF takes a quality-focused approach to Australian shares. Rather than simply tracking the biggest companies, it targets businesses with strong balance sheets, reliable earnings, and solid cash flow.

Top holdings include Telstra Group Ltd (ASX: TLS), Macquarie Group Ltd (ASX: MQG), National Australia Bank Ltd (ASX: NAB), and Woodside Energy Group Ltd (ASX: WDS). This ETF could suit beginners who want a more selective take on the local market. It was recently recommended by analysts at Betashares.

Betashares Nasdaq 100 ETF (ASX: NDQ)

Finally, the Betashares Nasdaq 100 ETF adds a growth tilt to a beginner portfolio by tracking the Nasdaq-100 Index. It provides exposure to innovative companies shaping technology, healthcare, and consumer trends.

Holdings include Amazon.com (NASDAQ: AMZN), Meta Platforms (NASDAQ: META), Broadcom (NASDAQ: AVGO), and Netflix (NASDAQ: NFLX).

The post 5 fantastic ASX ETFs for beginners in 2026 appeared first on The Motley Fool Australia.

But don't worry if you're not a fan of stock-picking. That's because exchange traded funds (ETFs) are here to save the day by offering simply access to large groups of stocks in one fell swoop.

With that in mind, here are three ASX ETFs that I would buy for the long term:

Betashares Nasdaq 100 ETF (ASX: NDQ)

The Betashares Nasdaq 100 ETF offers investors exposure to the top 100 non-financial stocks listed on the Nasdaq exchange.

This effectively means a concentrated basket of the world's most innovative technology leaders. Inside the ASX ETF, you will find giants such as Apple (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT), and Nvidia (NASDAQ: NVDA), along with rising players like Adobe (NASDAQ: ADBE) and Broadcom (NASDAQ: AVGO).

The Nasdaq 100 has historically outperformed most global indices thanks to its tilt toward fast-growing industries like cloud computing, artificial intelligence, consumer tech, and semiconductors. And with AI now driving a generational infrastructure buildout, many of the Betashares Nasdaq 100 ETF's largest holdings remain central to that global transformation.

Betashares Asia Technology Tigers ETF (ASX: ASIA)

The Betashares Asia Technology Tigers ETF targets some of the most influential and fast-growing technology companies across China, Taiwan, and South Korea. Key holdings include Tencent Holdings (SEHK: 700), SK Hynix (KRX: 000660), Alibaba Group (NYSE: BABA), Samsung Electronics (KRX: 005930), Taiwan Semiconductor Manufacturing Co. (NYSE: TSM), and PDD Holdings (NASDAQ: PDD).

These companies sit at the heart of global megatrends like e-commerce, artificial intelligence, social media, and semiconductor manufacturing. Taiwan Semiconductor, for example, produces the world's most advanced chips and plays a crucial role in powering everything from smartphones to autonomous vehicles. Tencent and Alibaba, meanwhile, dominate entertainment, cloud, and digital payments across Asia.

Betashares Global Cybersecurity ETF (ASX: HACK)

Cybersecurity has become one of the most essential industries in the digital economy, and the Betashares Global Cybersecurity ETF provides simple access to the world leaders in the space.

Its portfolio includes CrowdStrike Holdings (NASDAQ: CRWD), Palo Alto Networks (NASDAQ: PANW), and Fortinet (NASDAQ: FTNT). These are companies using advanced AI-powered tools to protect governments, corporations, and consumers from increasingly complex cyber threats.

One standout holding is CrowdStrike. The company's Falcon platform is widely considered one of the most advanced security solutions available, capable of detecting threats in real time through machine learning. With cyberattacks rising globally and businesses moving more systems into the cloud, cybersecurity spending is expected to grow steadily for years to come.

The post 3 ASX ETFs I'd buy right now to build wealth appeared first on The Motley Fool Australia.

To illustrate, the iShares Core S&P/ASX 200 ETF (ASX: IOZ), a simple ASX 200 index fund, has returned 12.97% per annum since 31 October 2022.

The US markets have done far better, though. The iShares S&P 500 ETF (ASX: IVV) has returned an average of 21.4% over that same timespan. That's exceptional, given that this index's long-term average is about 7.5% per annum.

However, there is one ASX ETF that has put these funds to shame.

It is known as the Global X FANG+ ETF (ASX: FANG).

Over the three years to 31 October, this ASX ETF has delivered not a 20% or 30% return per annum. Not even 40%.

Its average rate of return has been an astounding 54.24% per annum. This astronomical rate of return would have been enough to turn $10,000 into roughly $36,700 over that three-year span.

So how has this high-flying ASX ETF done it?

FAANGing to the top

Well, FANG is a fund that only holds ten stocks within it. By contrast, the ASX 200 ETF holds, well 200, and the S&P 500 fund, 500.

Those ten stocks are special, though. As you can probably gather from the name, they include all five members of the old 'FAANG' club – Facebook (now Meta Platforms), Apple, Amazon, Netflix and Google (now Alphabet).

In addition to these five stocks, FANG also holds Broadcom, CrowdStrike, NVIDIA Corp, ServiceNow and Microsoft.

Microsoft and NVIDIA are members of the 'Magnificent 7' club that FAANG has morphed into. Meanwhile, Broadcom is a chipmaker and software stock. ServiceNow operates in the cloud-based business software space, and Crowdstrike is a leader in cybersecurity.

As you can imagine, all of these companies have enjoyed a phenomenal few years, thanks to the boom in interest in AI-related companies.

To illustrate, Broadcom stock is up approximately 645% since early December 2022. Some other notable winners include Crowdstrike (up 311%), Meta Platforms (up 425%) and, of course, NVIDIA (up a massive 948.5%).

Given that all ten of these FANG stocks have been unbridled winners, it's no surprise to see the ETF deliver such breathtaking gains.

So is this ASX ETF a screaming buy?

Well, that's the trillion-dollar question. There's no doubt that FANG's ten holdings are some of the best and most profitable companies in the world, and many will probably continue to be for years to come. However, that doesn't mean this ETF will continue to grow at 50%-plus every year going forward. A majority of its holdings are now worth more than US$1 trillion, and in many cases, far higher than that. There comes a point when companies simply cannot sustain growth rates due to sheer size.

This ETF is also heavily exposed to the US tech sector. It is highly concentrated and may be punished if the now-positive sentiment turns against tech shares.

It is difficult to judge what kind of future this ASX ETF holds in store for its investors. I would be surprised if it continues to see anything close to its recent blazing performance in the years ahead. But then again, it's not hard to make the case that it represents a stake in some of the world's top businesses. Investors should keep in mind that FANG represents a very narrow bet on a narrow range of companies, and judge the risks and potential rewards for themselves.

The post Screaming buy? This ASX ETF has returned 54% a year since 2022 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.

That's why exchange-traded funds (ETFs) can be such a powerful starting point, they offer simplicity, instant diversification, and exposure to high-quality companies without the stress of picking individual winners.

If you're new to the share market and want a strong foundation, here are three ASX ETFs that could be perfect for beginner investors.

iShares S&P 500 ETF (ASX: IVV)

The iShares S&P 500 ETF is one of the most popular choices for new investors, and for good reason. This ASX ETF tracks the S&P 500 Index, giving you exposure to America's largest and most influential businesses.

Among its top holdings are Berkshire Hathaway (NYSE: BRK.B), Apple (NASDAQ: AAPL), Eli Lilly (NYSE: LLY), and Broadcom (NASDAQ: AVGO). These are all major players in their respective industries and key drivers of US market performance.

Eli Lilly is a pharmaceutical giant that has grown into one of the world's most valuable healthcare companies, powered by blockbuster drugs in areas such as diabetes and obesity treatment. Its strong research pipeline and global demand make it one of the most dependable earnings machines in the index.

Vanguard MSCI Index International Shares ETF (ASX: VGS)

If you want broad international diversification for your portfolio, the Vanguard MSCI Index International Shares ETF is hard to beat. This fund holds more than 1,200 stocks across major developed markets outside Australia, offering huge exposure with just a single trade.

Some of its largest positions include Nestle (SWX: NESN), Roche (SWX: ROG), and Toyota Motor Corporation (TYO: 7203). These are global leaders in consumer goods, healthcare, and automotive innovation.

Nestle is the Swiss food and beverage giant that owns household brands found in kitchens worldwide. Its global footprint, steady demand, and defensive earnings profile make it an anchor holding that helps smooth portfolio volatility when markets get bumpy.

Overall, the Vanguard MSCI Index International Shares ETF could be ideal for beginners who want long-term international growth without having to worry about choosing individual global stocks.

BetaShares Global Quality Leaders ETF (ASX: QLTY)

For those wanting a portfolio tilted toward high-quality, financially strong stocks, the BetaShares Global Quality Leaders ETF could be an excellent option.

This ASX ETF screens for businesses with high returns on equity, stable earnings, and strong balance sheets. These are traits that typically reflect resilient, well-managed businesses. Among its major holdings are Visa (NYSE: V), Novo Nordisk (NYSE: NVO), and Costco Wholesale (NASDAQ: COST).

Costco is the US retail giant that has built a powerful membership-based model that drives recurring revenue and high customer loyalty. Its disciplined operations and steady growth record make it a classic example of the kind of durable business the fund is designed to capture.

The team at BetaShares Global Quality Leaders ETF recently recommended this fund.

The post 3 ASX ETFs that could be perfect for beginner investors appeared first on The Motley Fool Australia.

Over the past three years, Nvidia has evolved from a niche chip designer into the most valuable company in the world, propelled by the unprecedented boom in artificial intelligence (AI).

Its graphics processing units (GPUs), once used largely to improve the rendering of visuals in video games, now provide key computing power in applications ranging from data center training clusters to humanoid robotics to autonomous vehicles. With demand for its chips still far exceeding supply, Nvidia's dominance in the AI chip space shows little sign of slowing.

Yet, the next five years could usher in a new wave of AI computing infrastructure leaders. I predict that one company in particular -- Broadcom (NASDAQ: AVGO) -- could surpass the combined market value of Amazon (NASDAQ: AMZN) and Palantir Technologies (NASDAQ: PLTR) by 2030, fueled by surging demand for the networking, connectivity, and custom silicon that help underpin the AI revolution.

Amazon and Palantir could plateau despite AI tailwinds

Both Amazon and Palantir are poised to benefit from the continued rise of AI. However, each faces meaningful hurdles when it comes to further valuation expansion in the medium term.

Amazon's clearest exposure the AI trend lies within Amazon Web Services (AWS) -- its crown jewel and primary profit engine. Yet AWS faces fierce competition on the enterprise side from Microsoft Azure and Google Cloud, both of which are deploying AI-powered tools at a faster clip. Meanwhile, Amazon's consumer-facing AI initiatives -- spanning robotics, logistics automation, and retail personalization -- are just getting started. It could be years before they materially boost its operating income.

In short, while Amazon's AI efforts are broad, they are unlikely to generate explosive upside anytime soon for a company that's already valued at roughly $2.3 trillion.

Palantir, on the other hand, has become synonymous with AI-driven data analytics and intelligence software. Its Artificial Intelligence Platform (AIP) -- built around its Foundry, Gotham, and Apollo operating systems -- has captured enormous attention, fueling accelerating revenue growth and sustained profitability.

However, Palantir's valuation tells a different story. Trading at a price-to-sales (P/S) multiple approaching 180, the stock carries a premium that leaves it little room for error. Investors have already priced in years of expected future success, meaning any slowdown in contract wins or government spending could lead to significant multiple compression. Between now and 2030, it seems more likely that Palantir's valuation will normalize than that it will skyrocket further. 

Why Broadcom could become the next AI infrastructure giant

Broadcom isn't the first name most investors associate with AI -- and that's exactly what makes it so compelling. The company sits at the intersection of the AI hardware supply chain, producing data center networking gear, custom application-specific integrated circuits (ASICs), and connectivity solutions that make hyperscale AI clusters possible.

In recent years, Broadcom has become a critical supplier to tech titans such as Amazon, Alphabet, Microsoft, Oracle, and IBM. Earlier this year, CEO Hock Tan indicated that just three of its hyperscale customers could contribute $60 billion to $90 billion in revenue by fiscal 2027 -- providing remarkable visibility into its business outlook and backlog strength. More recently, management disclosed that Broadcom had secured a new $10 billion chip contract -- though it did not disclose the customer's identity.

Together, these developments highlight a broader trend: As AI workloads evolve, demand for specialized processors beyond Nvidia's GPUs is rapidly accelerating.

At the same time, Broadcom's diversified business model provides a stabilizing counterweight. Its software division, bolstered by its 2023 acquisition of VMware, generates steady recurring revenue from enterprise cloud customers. Meanwhile, its semiconductor operations span 5G networking, broadband, Wi-Fi, and storage connectivity, giving the company multiple profit engines that are not connected to the AI trend.

This balance puts Broadcom in a position to maintain its resilience across economic cycles even as it capitalizes on the AI infrastructure boom. It should benefit enormously from the secular AI tailwinds without being overexposed to their volatility.

Valuation expansion could drive Broadcom to record highs

Over the past three years, Broadcom stock has delivered a staggering 700% return, handily outperforming both the S&P 500 and Nasdaq Composite. The AI revolution has been the driving force behind this ascent, propelling Broadcom into the trillion-dollar club. While its forward price-to-earnings (P/E) ratio of 51 is far from cheap, the company's growth prospects remain firmly intact.

AVGO PE Ratio (Forward) data by YCharts.

According to Wall Street estimates, AI infrastructure spending could surpass $7 trillion in the years ahead. As hyperscalers continue investing heavily into data center buildouts and custom silicon, Broadcom should benefit from both earnings growth and multiple expansion through the end of the decade.

For investors seeking AI stocks that can produce compounding gains, it may be time to look beyond the usual suspects. Broadcom might not enjoy the level of hype generated by Nvidia or the brand power of Amazon and Palantir, but it does occupy a deeply entrenched role in the AI supply chain that keeps the digital world running. 

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

The post Prediction: 1 artificial intelligence (AI) stock will be worth more than Amazon and Palantir combined by 2030 (Hint: It's not Nvidia) appeared first on The Motley Fool Australia.

Key Points

• Two customers combined to provide 39% of Nvidia’s revenue in its latest quarter.
• Nvidia’s supply chain is complex, depending on numerous suppliers, equipment designers, and manufacturers.
• Broadcom’s AI sales growth is heavily dependent on a handful of hyperscaler customers.

Perhaps no company benefited more from the artificial intelligence (AI) trend than Nvidia (NASDAQ: NVDA).

In just five years, Nvidia's most important end markets shifted from gaming and professional visualization to data centers, though its core products remained the same -- graphics processing units (GPUs) and associated software and infrastructure.

Companies across a wide array of industries now depend on Nvidia's solutions to power their AI workflows. But without a couple of key customers, Nvidia's growth in recent years wouldn't have been nearly as impressive as it was.

Here's why Nvidia is increasingly relying on two customers, and if the AI growth stock is a buy now.

Peeling back the curtain

In its quarterly reports, Nvidia regularly highlights the importance of a select group of key customers. It doesn't disclose their names, however. Instead, it refers to them as Customer A and Customer B.

In its fiscal 2026 first quarter, Customer A represented 16% of total revenue and Customer B was 14%. But in its latest earnings report, delivered on Aug. 27, Nvidia said that Customer A had contributed 23% of total revenue and Customer B amounted to 16%. In just three months, those two companies went from 30% of total revenue to 39%.

Nvidia's revenue was $44.1 billion in fiscal Q1 and $46.74 billion in fiscal Q2. Customer A and Customer B accounted for $13.23 billion in Q1 revenue and $18.23 billion in Q2 revenue. But Nvidia only grew revenue by $2.64 billion quarter-over-quarter. So without Customer A and B, Nvidia's revenue would have been down by $2.36 billion quarter-over-quarter.

Customer A and Customer B aren't just Nvidia's key accounts: They are single-handedly supporting its investment thesis right now.

The chipmaker's sales to four other direct customers contributed 14%, 11%, 11%, and 10% of revenue, respectively, in the fiscal second quarter. All of these unnamed customers' revenue was attributed to Nvidia's Compute and Networking segment for data centers -- which provided 87.9% of total revenue in its latest quarter.

Understanding Nvidia's supply chain

Nvidia's dependence on Customer A and Customer B is a risk worth monitoring. It's also a bit misleading due to the structure of Nvidia's supply chain.

Nvidia's key end users are hyperscalers like Amazon Web Services, Microsoft Azure, Alphabet's Google Cloud, Meta Platforms, and Oracle Cloud Infrastructure. But these companies often buy Nvidia's chips through contractors that assemble AI server racks with Nvidia's GPUs and associated networking, storage, cooling, etc.

For example, a hyperscaler may order one of Nvidia's GB300 Blackwell Ultra rack-scale servers from Hon Hai Precision Industry, commonly known as Foxconn, rather than buying it from Nvidia directly. On Aug. 26, Nvidia reported that Foxconn was among a list of companies adopting its new RTX Pro Servers for AI reasoning, physical AI, and business workloads.

In its latest quarterly report, Nvidia listed add-in board manufacturers (companies that build graphics cards using Nvidia's chips), distributors, original device manufacturers, original equipment manufacturers, and system integrators as examples of its direct customers. By contrast, it described cloud service providers, internet companies, enterprises, and public sector utilities, among others, as indirect customers that largely purchase products through the direct customers. In other words, it's not that AWS or Microsoft is likely Customer A or Customer B. Rather, those tags are probably being put on major distributors that are likely supplying multiple cloud infrastructure providers.

Concentration has become the norm for AI chip makers

Nvidia's jargon around customer identities can make it difficult to determine just how much of its business is tied to each specific hyperscaler. However, based on the capital expenditures of top cloud companies, it's clear that Nvidia will need its key end users to profit from their AI spending to justify them boosting their order volumes.

Nvidia isn't alone in the tech world in relying on just a few customers. Broadcom (NASDAQ: AVGO) management forecast that its AI semiconductor sales will make up over 32% of revenue in its fiscal third quarter. And a large fraction of that revenue is coming from a handful of customers.

On its fiscal Q4 2024 earnings call in December, Broadcom management discussed how the company is working to expand its core customer base beyond the three hyperscalers that have been major contributors to its top line. Now, it has two additional hyperscalers that are developing their own next-generation AI XPUs. Broadcom forecasts that it will convert these prospects into revenue-generating customers by 2027. While we don't know for sure who these customers are, Meta and Alphabet are almost certainly two of the three established customers, and Apple and TikTok parent company ByteDance could be the prospects, based on other news reports that they are both building custom chips with Broadcom.

Meta Platforms is building the world's first multigigawatt "supercluster" data center next year. And it's highly likely that this data center will be jam-packed with Broadcom AI clusters, given that Broadcom is working with Meta on its custom AI chips. Google Cloud partners with Broadcom to make its custom Tensor Processing Units, which power Google DeepMind's AI chatbot, Gemini, as well as Google Search and other applications.

By following Broadcom's more direct commentary on its key hyperscale customers, we can infer that Nvidia is depending on the same cast of characters to drive its growth.

Nvidia is still a buy

Nvidia's increasing reliance on Customer A and Customer B isn't necessarily a red flag, as these are direct customers (likely suppliers) that are processing orders for multiple end-users. However, what does pose a risk to Nvidia, Broadcom, and the AI investing theme in general is the possibility of a pullback in capital expenditures by hyperscalers.

Right now, capex as a percentage of revenue is at a five-year high for Amazon, Microsoft, Alphabet, Meta Platforms, and Oracle -- meaning that these companies are in expansion phases. However, eventually, the cycle may shift as these companies redirect their focus from accelerated growth to generating free cash flow. And when that happens, it will likely affect the primary beneficiaries of that spending -- companies like Nvidia and Broadcom.

Nvidia is still a foundational AI growth stock to buy and hold, but investors who buy it should understand that these cyclical gyrations could lead to choppy stock price movements. However, volatility like this is worth enduring over the long term when a business's underlying fundamentals are sound. 

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

The post Is Nvidia's increasing reliance on "Customer A" and "Customer B" a red flag for the AI growth stock? appeared first on The Motley Fool Australia.

The group of seven is comprised of Apple Inc (NASDAQ: AAPL), Tesla Inc (NASDAQ: TSLA), NVIDIA Corp (NASDAQ: NVDA), Meta Platforms Inc (NASDAQ: META), Amazon.com, Inc. (NASDAQ: AMZN), Alphabet Inc (NASDAQ: GOOGL) (NASDAQ: GOOG), and Microsoft Corp (NASDAQ: MSFT) stocks.

For a long time, these seven soaring US stocks have made up about a third of the market capitalisation of the S&P 500 Index (SP: .INX).

For the past few years, they have delivered an outstanding performance, exhibiting impressive earnings growth and share price growth.

But Gleeson says times are changing.

Magnificent Seven losing significance: expert

Gleeson says the Magnificent Seven is losing significance because the seven stocks are no longer performing in tandem as a group.

In a new article, Gleeson writes:

… the Magnificent 7 stock prices are no longer acting like a homogeneous group.

The best performing company in this cohort is Nvidia, whose share price is up 28%.

Tesla's is down 14% as markets come to the realisation that its business model is fundamentally different to the other Mag 7 names.

Check out the Magnificent Seven's divergent share price performance during our Aussie FY25 (1 July 2024 –  30 June 2025).

One Mag 7 stock leapt 61% while two of them lost value over the 12 months.

What's happening with these companies?

Gleeson says Apple has lost touch with the pack after delays in rolling out artificial intelligence (AI) features that underwhelmed users.

He writes:

The company is under increasing pressure to make a big AI acquisition to catch up to others like Meta and Microsoft.

Gleeson says companies like semiconductor giant Broadcom (NASDAQ: AVGO), data analytics firm Palantir Technologies (NASDAQ: PLTR), and subscription streaming service Netflix (NASDAQ: NFLX) have started to take over market leadership from Apple and Tesla.

This is happening because investors are switching to companies that are displaying stronger evidence of AI-related earnings growth.

Gleeson says:

As with the development of any new technology, new leaders can be expected to emerge over time.

This decoupling comes as the NASDAQ-100 Index (ASX: NDX) outpaces the earnings growth of the Magnificent Seven stocks.

Nasdaq 100 outperforms Mag 7 on earnings

Gleeson says the Mag 7 stocks delivered more than 15% year-over-year earnings growth in 2Q 2025.

This compares to a faster rate of 16.9% for the rest of the Nasdaq 100.

Gleeson argues the AI narrative is now broader than the Magnificent Seven stocks.

He comments:

If AI can deliver a productivity dividend, and massive capex spend on AI data centres and infrastructure has a stimulatory effect, it will likely benefit the US economy as a whole, not just the hyperscalers.

Other macroeconomic tailwinds are also supporting this shift.

Gleeson notes that recent weakness in the US dollar is boosting reported earnings for all tech companies selling to buyers worldwide.

Netflix, which earned 56% of its revenue outside the US in 2024, is a relevant example.

Betashares believes the Nasdaq 100 is well-positioned in this new landscape.

In our view, AI, currency and earnings growth provide strong tailwinds for the NASDAQ 100.

With higher rates unlikely, the threat of trade sanctions and retaliatory measures lifted, plus support from the White House, our view is the NASDAQ 100 has significant potential upside from here.

Have you heard of ASX NDQ?

Betashares is the provider of the popular ASX exchange-traded fund (ETF) Betashares Nasdaq 100 ETF (ASX: NDQ).

Gleeson says the NDQ ETF offers diversified exposure beyond the Magnificent Seven and includes Broadcom, Netflix, and Palantir stocks.

The post Why the Magnificent Seven 'is becoming an irrelevant concept': expert appeared first on The Motley Fool Australia.

Exchange-traded funds (ETFs) make this approach even easier by providing instant exposure to hundreds — sometimes thousands — of companies in a single trade.

If you want to keep your investing simple but effective in 2025 and beyond, the three ASX ETFs listed below could form the backbone of a stress-free, growth-focused portfolio. They are as follows:

iShares S&P 500 ETF (ASX: IVV)

For most Australians, global diversification starts with the United States. The iShares S&P 500 ETF tracks the S&P 500 index, giving investors easy access to 500 of America's largest companies. This includes tech titans like Microsoft (NASDAQ: MSFT) and Nvidia (NASDAQ: NVDA), as well as household names like Coca-Cola (NYSE: KO), Starbucks (NASDAQ: SBUX), and McDonalds (NYSE: MCD).

The US market has historically delivered strong returns, and the iShares S&P 500 ETF offers a low-cost way to tap into that growth while benefiting from the stability of blue-chip names across technology, healthcare, consumer staples, and financials.

Betashares Global Quality Leaders ETF (ASX: QLTY)

Another ASX ETF that makes investing simple is the Betashares Global Quality Leaders ETF. It focuses on global stocks with strong balance sheets, high profitability, and consistent earnings growth. These are the kind of businesses that often outperform over the long term. It currently includes stocks like Visa (NYSE: V), a payments leader with recurring revenues, and Johnson & Johnson (NYSE: JNJ), a global consumer staple brand with enduring demand.

This fund isn't just about growth — it is also about resilience. By filtering for quality metrics, the Betashares Global Quality Leaders ETF helps investors avoid weaker companies that might struggle in tougher markets. This ASX ETF was recently named as one to consider buying by the team at Betashares.

Betashares Nasdaq 100 ETF (ASX: NDQ)

If you're seeking growth, then the Betashares Nasdaq 100 ETF is hard to ignore. It offers exposure to 100 of the largest non-financial companies on the Nasdaq. This captures the heart of the global technology sector.

Alongside Apple (NASDAQ: AAPL) and Amazon (NASDAQ: AMZN), it includes innovative names like Broadcom (NASDAQ: AVGO), a key player in the semiconductor and networking space. With artificial intelligence and digital transformation reshaping industries, the Betashares Nasdaq 100 ETF provides a simple way to ride some of the biggest secular growth trends in the global economy.

The post 3 strong ASX ETFs to buy for simple investing appeared first on The Motley Fool Australia.

But for those who are looking to do better, certain exchange-traded funds (ETFs) listed on the ASX could offer a real chance to outperform.

These ETFs target powerful trends, innovation, and high-growth sectors that could provide stronger returns over the next decade. Here are three that stand out.

Betashares Nasdaq 100 ETF (ASX: NDQ)

This hugely popular ASX ETF gives investors access to the 100 largest non-financial companies listed on the Nasdaq exchange. This includes some of the most dominant technology names on the planet.

The portfolio is heavily weighted to companies like Apple (NASDAQ: AAPL), Microsoft (NASDAQ: MSFT), Amazon (NASDAQ: AMZN), NVIDIA (NASDAQ: NVDA), and Alphabet (NASDAQ: GOOGL). These are businesses with powerful competitive advantages, global scale, and long runways for growth across sectors such as cloud computing, AI, and digital infrastructure.

Despite their size, many of these companies are still growing earnings at double-digit rates. If they can maintain momentum — especially in emerging fields like artificial intelligence — this fund could continue delivering returns above 10% per annum.

Global X FANG+ ETF (ASX: FANG)

If you're looking for high-conviction exposure to the world's most innovative tech and internet stocks, the Global X FANG+ ETF is worth a look. This ASX ETF tracks an equal-weighted index of 10 leading technology and digital companies, including Meta Platforms (NASDAQ: META), Netflix (NASDAQ: NFLX), Crowdstrike (NASDAQ: CRWD), and Broadcom (NASDAQ: AVGO).

The Global X FANG+ ETF takes a narrower approach than the Betashares Nasdaq 100 ETF, concentrating on disruptive growth companies that are shaping the digital economy. This could lead to more volatility, but also more upside in strong markets. Over the past decade, many of these stocks have significantly outperformed broader indices — and with innovation still running hot, that trend may continue.

Betashares S&P/ASX Australian Technology ETF (ASX: ATEC)

While global tech gets plenty of attention, some of the most exciting innovation is happening right here in Australia. The Betashares S&P/ASX Australian Technology ETF provides investors with exposure to locally listed tech stars such as Xero Ltd (ASX: XRO), WiseTech Global Ltd (ASX: WTC), NextDC Ltd (ASX: NXT), and Life360 Inc (ASX: 360).

These are companies with strong recurring revenue models, global aspirations, and high margins.

If you believe in the future of Australia's tech sector and want to back homegrown innovation, this fund could be a smart option — particularly over a 10-year horizon.

The post 3 fantastic ASX ETFs that could beat the market over 10 years appeared first on The Motley Fool Australia.

Warren Buffett readily admits that he doesn't understand artificial intelligence (AI). He has also said that he won't invest in businesses that he understands. So, does that mean the legendary investor doesn't own any AI stocks? Nope.

Actually, Buffett has invested roughly $90 billion in nine companies that are heavily focused on AI. Here they are -- and which one is the best of the bunch.

AI stocks in Berkshire Hathaway's portfolio

Apple (NASDAQ: AAPL) ranks as the largest holding in Berkshire Hathaway's (NYSE: BRK.A) (NYSE: BRK.B) portfolio. Berkshire's stake in the iPhone maker is valued at close to $59.3 billion. Although Buffett significantly reduced the conglomerate's position in Apple last year, it still makes up 21% of Berkshire's total portfolio.

AI has been at the forefront of Apple's development strategy for years. However, the company was seemingly left behind in the generative AI race until it launched Apple Intelligence in 2024. So far, though, Apple Intelligence doesn't appear to be igniting the super-cycle of iPhone upgrades that some analysts predicted.

Amazon (NASDAQ: AMZN) is another top AI stock in Berkshire's portfolio, albeit a much smaller one. Berkshire owns around $2.1 billion of the e-commerce and cloud service giant's shares. Buffett didn't make the initial decision to buy Amazon; one of Berkshire's other investment managers (either Todd Combs or Ted Weschler) bought the stock.

Most AI models run in the cloud. As the largest cloud services provider in the world, Amazon Web Services (AWS) has been a big winner as organizations scrambled to build and deploy AI models in the cloud. Amazon is also using AI extensively internally to increase efficiency and provide more services to customers.

AI stocks in Buffett's "secret portfolio"

Apple and Amazon are the only AI stocks owned directly by Berkshire Hathaway. But I said that Buffett owned nine AI stocks. Where are the other seven? In Buffett's "secret portfolio."

General Reinsurance acquired New England Asset Management (NEAM) in 1995. Three years later, Berkshire Hathaway acquired General Re. NEAM continues to manage investments for insurance companies. Its holdings don't show up in Berkshire Hathaway's regulatory filings, but any stock owned by NEAM is also owned by Buffett.

Apple is the only AI stock in both Berkshire's and NEAM's portfolios. NEAM owns two other so-called "Magnificent Seven" stocks -- Google parent Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) and Microsoft (NASDAQ: MSFT). Like Amazon, both Alphabet and Microsoft are major cloud service providers and are profiting from the strong AI tailwind.

NEAM also has stakes in a couple of tech pioneers that are investing heavily in AI. IBM (NYSE: IBM) made headlines in the past with the success of its Watson AI technology. Texas Instruments (NASDAQ: TXN) isn't exactly a shining star in the AI world. However, the company makes edge AI products (AI deployed on local devices) and is working with Nvidia to develop power management and sensing technologies for data centers.

The stocks of three AI chipmakers are also in NEAM's portfolio. Broadcom (NASDAQ: AVGO) manufactures AI products, including Ethernet switches designed to accelerate AI workloads and custom AI accelerators. NXP Semiconductors (NASDAQ: NXPI) and Qualcomm (NASDAQ: QCOM) sell products that support edge AI.

The best of the bunch

If you're an income investor, Texas Instruments is probably the best pick among Buffett's nine AI stocks. Its forward dividend yield stands at 2.73%.

Alphabet is arguably the most attractively valued AI stock in the group, with growth prospects factored in. The Google parent's price-to-earnings-to-growth (PEG) ratio is 1.36.

I think the best Buffett AI stock all-around, though, is Amazon. The company is poised to profit as more organizations move their apps and data to the cloud. It still has significant growth prospects in e-commerce as well. Amazon is also expanding into new markets, including healthcare, autonomous ride-hailing, and satellite internet services.

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

The post Warren Buffett has $90 billion invested in these 9 artificial intelligence (AI) stocks. Here's the best of the bunch. appeared first on The Motley Fool Australia.

For those looking to put $10,000 to work in April, ASX exchange-traded funds (ETFs) offer an easy way to gain instant diversification while taking advantage of current market conditions.

Here are a couple of top ASX ETFs that could be great options this month. Let's see what sort of shares they are invested in:

Vanguard MSCI Index International Shares ETF (ASX: VGS)

Diversification is key to long-term investing success, and Australian investors often have too much exposure to local stocks.

The Vanguard MSCI Index International Shares ETF helps solve this issue by providing easy access to over 1,400 leading global companies. This includes some of the biggest names in the world, such as Apple (NASDAQ: AAPL), LVMH, Microsoft (NASDAQ: MSFT), Nestle, Starbucks (NASDAQ: SBUX), and Telsa (NASDAQ: TSLA).

This means that with this popular ASX ETF, investors gain exposure to the global economy's future growth without needing to pick individual winners.

Over the last decade, this ASX ETF has delivered strong returns, and with a large number of quality stocks among its holdings and the fund trading well short of its highs, it remains a compelling option for Australian investors looking beyond the ASX in April.

Betashares Nasdaq 100 ETF (ASX: NDQ)

Technology stocks have had a bumpy ride in recent weeks, but history shows that investing in innovation can be very rewarding over the long run.

That's where the Betashares Nasdaq 100 ETF comes in. This hugely popular ASX ETF provides exposure to 100 of the largest non-financial companies listed on the Nasdaq stock exchange, which includes many of the world's most innovative businesses.

The Nasdaq 100 is home to household names such as Amazon (NASDAQ: AMZN), Google parent Alphabet (NASDAQ: GOOG), and Meta Platforms (NASDAQ: META), as well as companies at the forefront of artificial intelligence (AI), cloud computing, and digital transformation, such as Nvidia (NASDAQ: NVDA) and Broadcom (NASDAQ: AVGO).

While tech stocks can be volatile in the short term, long-term investors have been handsomely rewarded. And with AI set to reshape industries, cloud computing expanding rapidly, and digital payments continuing to grow, the Betashares Nasdaq 100 ETF offers an easy way to gain exposure to these powerful trends without having to pick stocks.

The post Where to invest $10,000 into ASX ETFs in April appeared first on The Motley Fool Australia.

Yep, between 19 February and 13 March, the S&P 500 fell by 10.13%.

Over in the US, the big tech stocks like Apple, Microsoft, NVIDIA, Tesla and Amazon command the largest weighting on the stock market, just as the big four banks do here on the ASX.

Given this fall in the S&P 500, it will come as no surprise to hear that the 'magnificent seven' tech stocks had a rather nasty few weeks, too. For example, Apple stock tanked by more than 15% between 25 February and 13 March. Nvidia fared even worse, crashing 24% between 20 February and 10 March.

Over a similar period, Tesla shares plunged more than 38%, although there were probably other factors at play there.

More recent weeks have been kinder to some of the big tech stocks over the States.

But whether we have truly found a bottom and turned a corner remains to be seen. After all, we are set for a fairly dramatic week on global markets this week with President Donald Trump's tariff 'liberation day' fast approaching.

However, if an investor reckons we've hit or already seen a bottom in this big tech correction, there is one ASX ETF that might be a top buy.

One ASX ETF to buy if big tech has bottomed

That ASX ETF is the Global X FANG+ ETF (ASX: FANG). This exchange-traded fund (ETF) is essentially a pure-play bet on the biggest US tech stocks. Unlike most ASX ETFs, it holds a very small portfolio, with only ten underlying holdings at present. Those ten underlying holdings consist of six of the magnificent seven stocks (Tesla misses out), in addition to Netflix, Crowdstrike Holdings, ServiceNow and Broadcom.

These ten shares are given an equal weighting of approximately 10% each.

As such, if an ASX investor is looking for a quick and easy way to invest in the biggest tech stocks on the US markets, this ETF is a prime candidate. On an on-going basis, it is more expensive owning this ETF than the individual stocks, with FANG charging a management fee of 0.35% per annum.

As one would expect, FANG has also had a volatile few weeks. Between 18 February and 11 March, FANG units cratered by 17.22%. Those same units are still 17.5% down from where they were on 18 February.

Let's see how the rest of 2025 treats the Global X FANG+ ETF. If we have indeed seen a bottom for big tech over in the US, this will be an interesting fund to watch.

The post Think big tech has bottomed? Buy this ASX ETF appeared first on The Motley Fool Australia.

One of the biggest market drivers of technology stocks over the past couple of years has been rapid advancements in the field of artificial intelligence (AI). These next-generation algorithms took a giant leap forward from their predecessors, promising to streamline processes and improve productivity. Many big tech companies have been spending heavily to get a jump on the technology.

But a Chinese start-up called DeepSeek may have just upended conventional thinking about how best to train AI models. As a result, a slew of AI stocks tumbled on Monday. AI-centric chipmaker Nvidia (NASDAQ: NVDA)  crashed 16.86%, semiconductor specialist Broadcom (NASDAQ: AVGO) crumbled 17.4%, cloud and software giant Microsoft (NASDAQ: MSFT) slumped 2.14%, and cloud computing and search titan Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) fell 4.03%.

Enter DeepSeek

One-year-old Chinese start-up DeepSeek introduced its latest AI model, dubbed R1, and its abilities caught many in the tech world off guard. The performance of the system, which is similar to OpenAI's ChatGPT, quickly ascended the ranks to become one of the top 10 in the world. What made these results even more striking was that they were achieved with older-generation processors at a much lower cost, according to the company.

DeepSeek achieved these remarkable results by taking a new approach to training its AI models. The process, known as reinforcement learning -- or reward-driven optimisation -- appears to be more adept at refining its strategy for problem-solving or attempting different approaches to achieve the desired results.

Thus far, one of the biggest challenges with AI is not knowing how the algorithms arrived at a particular conclusion, making them a "black box." DeepSeek's R1 model shows its work, thus eliminating the uncertainty.

Venture capitalist and well-known tech aficionado Marc Andreessen fueled the fire this weekend when he posted on X (formerly Twitter) that "DeepSeek R1 is one of the most amazing and impressive breakthroughs I've ever seen -- and as open source, a profound gift to the world."

To be clear, experts say that DeepSeek's R1 still trails the performance capability of models produced by OpenAI and Alphabet, but the fact that it was able to do so with a smaller number of inferior chips threatened to upend the existing paradigm.

The potential implications

AI stocks and the broader tech sector plunged on the news, reeling from the potential implications for the industry:

• Nvidia is the gold standard and leading provider of the graphics processing units (GPUs) used to train and run AI systems. The company is believed to control as much as 98% of the data center GPU market, according to semiconductor analyst firm TechInsights. If AI models can be trained on lower-cost, inferior chips, Nvidia has a lot to lose.
• Broadcom supplies many of the networking products that work side-by-side with chips in the data center. The company's Ethernet switching and application-specific integrated circuits (ASICs) help facilitate the movement of data. If demand for these high-end chips falters, sales of ancillary products -- like those in Broadcom's arsenal -- could suffer as well.
• Microsoft helped kick-start the AI revolution with its hefty $13 billion investment in OpenAI and by integrating its AI capabilities across its suite of products and services. The company recently announced plans to spend $80 billion on data centers over the coming year. If there's a more cost-effective approach, customers might not be as willing to fork over top dollar for Microsoft's solutions.
• Alphabet was another company that was quick off the mark, spending heavily to develop next-generation AI models for its Google Cloud customers. Like Microsoft, if there are less costly alternatives, Alphabet's results could suffer.

That said, veteran Wedbush tech analyst Dan Ives called today's sell-off a "golden buying opportunity," noting that many of the claims by the start-up have yet to be verified. He goes on to suggest that "no U.S. Global 2000 [company] is going to use a Chinese start-up DeepSeek to launch their AI infrastructure," saying it doesn't rise to the level of "competitive threat."

Further fueling the decline of some of these stocks is their higher valuations, at least when measured using the most commonly employed metrics. Heading into today's trading, Broadcom, Nvidia, and Microsoft were selling for 200 times, 56 times, and 37 times earnings, respectively. Alphabet was the outlier, selling for a discount at 27 times earnings.

It's important to note that while the price-to-earnings (P/E) ratio is among the most widely used valuation metric, it tends to fall short when assessing high-growth stocks. After today's decline, Nvidia, Microsoft, Broadcom, and Alphabet are selling for 41 times, 33 times, 33 times, and 22 times forward earnings -- so they're not nearly as expensive as they might appear at first glance.

Finally, it's still early days in the development of generative AI. Today is a prime example of a knee-jerk reaction from some investors when a more measured approach is called for. Each of our quartet of stocks has an impressive track record going back decades, and while it may be tempting to follow the crowd and give in to the market panic, astute investors will know to wait for all the evidence to come in before leaping to what could be a costly conclusion.

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

The post Why Nvidia, Microsoft, and other US artificial intelligence (AI) stocks just crashed appeared first on The Motley Fool Australia.

What a year it was for the stock market in 2024. The S&P 500 ripped higher by more than 27% as the bull market continued for a second year. A large share of those gains came from the "Magnificent Seven" stocks, some of the world's largest tech and artificial intelligence companies. These mega-cap companies have market caps ranging from $1.5 trillion to $3.8 trillion, so a positive move for any of these stocks can have an outsized impact on the broader S&P 500 index. Almost all of the Magnificent Seven enjoyed big gains in 2024. With the Magnificent Seven morphing into the Fateful Eight, can these stocks carry the market again in 2025?

The Magnificent Seven plus one

Bank of America analyst Michael Hartnett coined the term Magnificent Seven in 2023, grouping several stocks that demonstrated dominance from the financial, market, and technological innovation perspectives. Here's how the Magnificent Seven stocks performed this year through Dec. 25:

GOOG data by YCharts.

Every stock in the Magnificent Seven outperformed the broader market except Microsoft (NASDAQ: MSFT), and the average performance of the Magnificent Seven was close to 69%. This is a big deal because the Magnificent Seven accounts for roughly a third of the value of the market-cap weighted S&P 500 and more than 50% of the value of the Nasdaq Composite.

Recently, the On The Tape podcast, hosted by Wall Street veterans Dan Nathan, Guy Adami, Danny Moses, and Liz Young Thomas, coined a new name for a group of key tech giants: Their "Fateful Eight" starts with the Magnificent Seven, but adds chipmaking and software giant Broadcom (NASDAQ: AVGO). Broadcom's market cap recently surpassed $1 trillion, and the stock is up by more than 45% in the past month.

What can we expect from the Fateful Eight in 2025?

After an epic year, here are forward earnings ratios for the Fateful Eight companies:

GOOG PE Ratio (Forward) data by YCharts.

These are pretty lofty valuations, with Tesla (NASDAQ: TSLA) breaking away from the pack and Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) and Meta Platforms (NASDAQ: META) looking more reasonable. In light of that, many market watchers question whether the major indexes will perform well next year, given that these eight companies make up so much of their value. Still, most Wall Street analysts expect the market to continue to perform well in 2025, though not as well as it did over the last two years.

With the market up by about 57% over the last two years, it seems improbable that it could replicate such a strong performance for a third consecutive year. However, leading up to the dot-com crash, the market soared for five straight years in the late 1990s, and the tailwinds from AI seem powerful given how big the potential markets are and how impactful AI is expected to be in our daily lives.

I think inflation and Treasury yields will play large roles in the performance of these stocks next year. With the 10-year Treasury yield close to 4.6% (as of Dec. 26), investors are certainly concerned about the prospect of inflation reigniting in 2025. The Federal Reserve is projecting only two interest rate cuts in 2025, down from four cuts it previously anticipated. In addition, some worry about the impact that President-elect Donald Trump's policies will have on the economy.

That said, better data from the labor market or the Consumer Price Index, which would put more interest rate cuts in play without the prospect of a recession, could lift stocks, particularly those in the tech sector that trade better in a "risk-on" environment. Other market strategists think the Fateful Eight will become defensive plays due to the uncertainty ahead.

I expect the market to experience turbulence in 2025. However, I don't expect Broadcom's inclusion in the Fateful Eight will have a significant impact on the group, and I don't expect the Fateful Eight to outperform the Magnificent Seven in 2025 considering the stocks have elevated valuations, tougher earnings comps, and economic challenges from renewed inflation or a potential recession. These stocks may still end 2025 at higher levels than they trade at now, but I wouldn't expect them to deliver booming results like those they put up in 2024.

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

The post Will the "Fateful Eight" Stocks Outperform the "Magnificent Seven" in 2025? appeared first on The Motley Fool Australia.

The ETF seeks to track the performance of the NASDAQ-100 Index (NASDAQ: NDX) before fees. This index represents the 100 largest stocks on the NASDAQ by market capitalisation.

When people think of the NASDAQ 100, they think US tech shares.

That's fair enough, particularly given the dominant presence of the Magnificent Seven, which are either tech developers themselves or use high tech in their businesses.

But in reality, only about half (49.7%) of the NASDAQ 100 is tech stocks. The rest are communications shares (16.4%), consumer discretionary (13.4%), consumer staples (5.9%), health care (5.9%), and others.

Over the past 12 months, the Betashares Nasdaq 100 ETF has risen by an impressive 30.19%. The NDQ ETF was trading at $47.68 per unit on Thursday, down 0.68% for the day.

So, which stocks have contributed most to another year of exceptional capital gains for the Betashares Nasdaq 100 ETF (ASX: NDQ)?

12 stocks pumping up the NDQ ETF

Nvidia Corp (NASDAQ: NVDA)

Shares in chip maker Nvidia have ripped 180.6% higher to US$135.34 over the past year.

It's no surprise that Nvidia is the fastest-growing stock within the Betashares Nasdaq 100 ETF.

Arm Holdings PLC-ADR (NASDAQ: ARM)

The Arm Holdings share price has shot 118.6% higher to US$133.37 over the past year.

Arm is a British semiconductor and software design company based in England.

Constellation Energy Corp (NASDAQ: CEG)

Stock in Constellation Energy has risen 102.6% to US$253.39 over the past 12 months.

Constellation is one of the largest energy suppliers in the United States.

Netflix Inc (NASDAQ: NFLX)

Shares in streaming company Netflix have also contributed strongly to the growth of the Betashares Nasdaq 100 ETF over the past year.

Netflix shares are up 83.1% to US$877.34.

Fortinet Inc (NASDAQ: FTNT)

Stock in cybersecurity services provider, Fortinet has risen 75% to US$94.06 per share.

Intuitive Surgical, Inc. (NASDAQ: ISRG)

The Intuitive Surgical share price is up 71% to US$535.55 per share.

Intuitive Surgical is a US biotech that develops and manufacturers clinical and surgical robotics.

Meta Platforms Inc (NASDAQ: META)

Stock in social media empire Meta has risen 70.1% to US$569.20 per share over the past 12 months.

Broadcom Inc (NASDAQ: AVGO)

Shares in Broadcom have ascended 68% to US$159.67 over the past year.

Broadcom is a US developer and manufacturer of semiconductor and infrastructure software products.

Booking Holdings (NASDAQ: BKNG)

Stock in Booking Holdings has lifted 66.8% to US$5,223.15 per share.

Booking is a US travel technology company and one of the priciest stocks, in dollar terms, within the NDQ ETF.

Crowdstrike Holdings Inc (NASDAQ: CRWD)

Stock in US cybersecurity company, Crowdstrike has risen by 65.5% to US$347.59 over the year.

Costco Wholesale Corporation (NASDAQ: COST)

The CostCo share price has ascended 61.6% to US$961.55 over the past year.

CostCo is a membership warehouse retailer that sells goods at wholesale prices.

Marvell Technology Inc (NASDAQ: MRVL)

Stock in Marvell Technology has risen 61.2% to US$90.10 per share over the past 12 months.

Marvell is a US semiconductor developer.

Price history snapshot: Betashares Nasdaq 100 ETF

The Betashares Nasdaq 100 ETF has risen by 125.4% over the past five years.

This compares to a 23.7% increase in the S&P/ASX 200 Index (ASX: XJO).

The post Betashares Nasdaq 100 ETF (NDQ) is up 30% in a year. Which stocks have turbocharged its rise? appeared first on The Motley Fool Australia.

In the year to date, the S&P 500 Index (SP: INX) has risen by 22.6%, and the Nasdaq Composite Index (NASDAQ: IXIC) has lifted by 26%.

Meantime, the ASX 200 Index has increased by 7%. Bear in mind that this rise excludes dividend returns, which are usually about 4% to 4.5% per annum.

But will US shares continue to deliver such strong returns in the future?

Not according to top broker, Goldman Sachs.

Why is Goldman tipping a major fall in US shares returns?

Goldman Sachs says the S&P 500 has delivered an annualised nominal return of 13% to investors over the past decade. But a significant change is coming.

In a new note released this month, the broker says it expects the S&P 500 to deliver just a 3% annualised nominal return over the next 10 years.

Goldman said its new forecasts were lower than other analysts' predictions, which averaged 6% per annum over the next decade.

The broker said its forecasts included a range of outcomes from -1% to 7% returns per annum.

Goldman said the most important variable in its forecast was the starting valuation of the index — specifically, its cyclically adjusted P/E ratio (CAPE) of 38x.

David Kostin, chief US shares strategist at Goldman Sachs Research, wrote:

In theory, a high starting price, all else equal, implies a lower forward return.

A stronger relationship exists between starting valuation and forward 10-year returns compared with forward 1-year or 5-year horizons.

The current high level of equity valuations is a key reason our 10-year forward return forecast sits at the lower end of the historical distribution.

The CAPE ratio currently equals 38x, ranking at the 97^th percentile since 1930. 

Soaring Magnificent Seven stocks create risk

Market concentration was another factor in the broker's lower forward 10-year returns forecast. 

Kostin said the S&P 500 was near its highest level of concentration in 100 years.

Today, the 10 largest stocks in the index account for more than a third of its total market capitalisation.

The top 10 US shares include the Magnificent Seven of Apple Inc, Microsoft Corp, Nvidia Corp, Amazon.com Inc, Meta Platforms Inc, Tesla Inc, and the two Alphabet Inc stocks, GOOGL and GOOG, plus Broadcom and Warren Buffett's Berkshire Hathaway B.

Kostin said that when equity market concentration is high, the index's performance is strongly dictated by the prospects of a few stocks, leading to greater volatility.

High concentration is a risk because it is very hard for companies to continue delivering outstanding earnings growth.

He said:

Our historical analyses show that it is extremely difficult for any firm to maintain high levels of sales growth and profit margins over sustained periods of time.

The same issue plagues a highly concentrated index. Furthermore, the risk embedded in high concentration markets is not always reflected in valuation.

Kostin said without the concentration factor, their baseline forecast for US shares would be about 4% higher, at 7% per year rather than 3% per year, and the range would be 3% to 11% rather than -1% to 7%.

He also said their forecasts suggested US shares "will face stiff competition from other assets during the next decade". 

Our 3% annualized equity return forecast combined with a current ten-year US Treasury yield of 4% and ten-year breakeven inflation of 2.2% suggests the S&P 500 has roughly a 72% probability of trailing bonds and a 33% likelihood of lagging inflation through 2034.

Excluding concentration, the probabilities of underperforming would be 7% and 1%, respectively.

More Aussies investing in international ETFs

As we've recently reported, Australian investors are increasingly choosing to buy ASX ETFs that provide exposure to international shares.

International shares ETFs — most of which are heavily skewed to US shares — have attracted more than 56% of total cash inflows into ASX ETFs this year, according to Vanguard and ASX data.

The post Here's why Goldman Sachs sees a decade of lower returns ahead for US shares appeared first on The Motley Fool Australia.