Why This AI-Focused ETF Could Deliver Triple-Digit Returns Without Chasing Nvidia's Coattails

The Diversification Advantage: Why “Not Being Nvidia” Is Actually a Strength

Here’s the uncomfortable truth most investors face: Chasing a single mega-performer like Nvidia (NASDAQ: NVDA) through its stock means betting everything on one name. Meanwhile, an artificial intelligence ETF spreads that risk across dozens of holdings, which inevitably caps upside—but here’s the flip side that matters more than headline-seeking investors realize.

Consider the Invesco AI and Next Gen Software ETF (NYSEMKT: IGPT). Yes, Nvidia outpaced this fund by a margin exceeding 5-to-1 between 2024 and 2025. But here’s what gets overlooked: The IGPT slightly outperformed the Nasdaq-100 over that same window. That’s not flashy, but for a diversified basket holding 100 stocks, it signals something important—the underlying mechanics are working. This ETF charges just 0.56% annually and maintains positions across 17 industries, with over 43% allocated to semiconductor stocks while maintaining substantial exposure to AI hyperscalers and enterprise software providers.

The shift from “stock-picking burden” to “structured diversification” isn’t a weakness. It’s a feature. Especially when that diversification includes exposure to multiple vectors of AI adoption rather than betting on a single chip manufacturer’s dominance.

The Strategic Pivot: Software Meets AI

This fund’s backstory reveals something telling about market dynamics. Originally conceived as a software-focused investment vehicle two decades ago, Invesco rebranded and reindexed this offering in June 2023 to align with the exploding artificial intelligence landscape. That wasn’t desperation—it was recognition that the future of AI opportunity extends far beyond semiconductor production into the application layer.

This AI/software intersection is where the real leverage exists for long-term returns. Take Adobe, a top-10 holding in this ETF portfolio. The company behind creative industry stalwarts like Illustrator and Photoshop isn’t just a legacy software name. During its December fiscal fourth-quarter earnings call, CEO Shantanu Narayen emphasized the company’s “growing importance in the global AI ecosystem and the rapid adoption of our AI-driven tools.” Adobe isn’t banking on AI—it’s actively embedding it into the workflows professionals already depend on daily. That’s a different—and arguably more durable—value proposition than pure-play semiconductor exposure.

Similarly, Snowflake demonstrates how software infrastructure can multiply AI opportunity. The company’s AI-powered Cortex platform enables customers to build applications directly from data they’re already storing and securing on Snowflake’s infrastructure. This creates a natural expansion path: existing client relationships deepen through new AI capabilities, while new customers recognize the efficiency gains. That’s expansion on top of retention—a rare combination in software economics.

The Growth Tailwind: Where the Data Points

Goldman Sachs forecasts that the market for AI-powered customer service software could expand by 20% to 45% by 2030. Notice that upper range? It represents growth more than double the broader software industry’s outlook. That’s not speculation—it’s institutional conviction based on market modeling.

The potential for agentic AI advancement adds another layer. As autonomous AI agents become workplace staples, the software developers and platforms held within this ETF will become increasingly critical infrastructure. They’re not just riding the wave; they’re architecting it. Companies addressing friction points in AI adoption—interoperability, data governance, integration complexity—will unlock new adoption curves as they solve those barriers.

This ETF’s retention of its software roots while embracing AI-driven composition creates redundancy that works in investors’ favor. Multiple growth drivers instead of a single narrative.

The Reality Check: What This Fund Probably Won’t Do (And Why That’s Okay)

Let’s establish what IGPT won’t accomplish: It won’t replicate Nvidia’s historic return trajectory. Few assets ever do. That’s not because the fund is poorly constructed; it’s mathematical. Individual mega-cap winners sometimes generate 1000%+ gains. Baskets of 100 stocks don’t. That’s not failure—that’s how diversification works.

But here’s what matters more than chasing lightning-in-a-bottle returns: The fundamental conditions enabling this ETF to deliver sustained triple-digit gains over multi-year holding periods are firmly in place. The market infrastructure for AI is expanding. Enterprise adoption is accelerating. The software layer that enables AI deployment is becoming indispensable. These aren’t speculative narratives; they’re observable market trends being priced into forward guidance across multiple sectors.

The Investment Thesis Distilled

The Invesco AI and Next Gen Software ETF occupies a strategic position many growth-focused investors overlook precisely because it doesn’t command the attention of concentrated single-name bets. Its $652 million in assets under management, 20-year operating history, and diversified exposure to both semiconductor and software segments create a vehicle that can participate meaningfully in AI’s long-term expansion without requiring perfect timing or conviction in any individual constituent.

For investors weighing AI exposure against pure performance-chasing, this fund’s composition and trajectory suggest meaningful upside remains available—not through lottery-ticket thinking, but through exposure to structural transformation in how software, data, and artificial intelligence intersect.