Why This artificial intelligence ETF Could Deliver Triple-Digit Returns Without Chasing Nvidia's Shadow

An AI Fund That Started as Software – Now It’s Both

The Invesco AI and Next Gen Software ETF (NYSEMKT: IGPT) presents an intriguing paradox in today’s tech landscape. Launched two decades ago as a traditional software-focused vehicle, this fund underwent a strategic repositioning in June 2023 to capitalize on the artificial intelligence revolution. With $652 million in assets under management and a lean 0.56% annual expense ratio, it’s neither a niche play nor a newcomer to the market.

What makes this fund particularly compelling is its hybrid DNA. Unlike pure-play artificial intelligence ETF alternatives that live and breathe semiconductors, IGPT maintains meaningful exposure across both frontiers. The portfolio allocates over 43% to semiconductor stocks—capturing the AI infrastructure boom—while simultaneously preserving its software heritage. This balanced approach matters because the real wealth creation in AI isn’t just happening in chip fabs; it’s materializing in intelligent applications and platforms.

The Dual Engine: Hardware and Software Synergy

The fund’s construction reveals something sophisticated. It holds 100 positions spanning 17 industries, yet the concentration tells a story. Beyond the semiconductor dominance, IGPT secures significant exposure to cloud hyperscalers and enterprise software companies building AI-native solutions.

Take Adobe as a representative example. Featured among the fund’s top 10 holdings, the creative software giant has shifted into an AI-powered company. During its recent earnings call, leadership emphasized the company’s “expanding role within the global artificial intelligence ecosystem,” with momentum around Generative Fill and other machine-learning-augmented tools. This represents the artificial intelligence ETF thesis at work—software isn’t just adopting AI; it’s becoming inseparable from it.

Snowflake illustrates another dimension of this opportunity. The cloud data platform has engineered its Cortex AI suite specifically to help customers monetize their existing data warehouses. By embedding artificial intelligence directly into workflows, Snowflake creates sticky relationships with enterprises—both deepening existing accounts and opening doors to new customers. It’s a playbook that repeats across this fund’s software holdings.

Market Tailwinds Backing the artificial intelligence ETF Thesis

The growth narrative deserves examination beyond mere sentiment. Goldman Sachs projects that AI-enabled customer service software could expand 20-45% annually through 2030—growth rates that dwarf the broader software industry’s mid-teens trajectory. Even the conservative end of that range suggests sustained tailwinds.

Agentic AI represents another emerging catalyst. As autonomous agents handle more complex tasks, companies leveraging this technology gain competitive advantages. The software names held within this artificial intelligence ETF are positioned to serve this evolution, whether through data infrastructure, application development, or enterprise integration.

Meanwhile, software developers nationwide are tackling the unglamorous but critical work of scaling AI deployment. Reducing latency, improving model interpretability, managing costs, and simplifying integration—these technical challenges keep many enterprise customers from fully embracing AI solutions. As solutions mature, adoption accelerates, potentially unlocking fresh upside for fund holders.

Performance Reality and Realistic Expectations

Between 2024 and 2025, Nvidia outpaced this ETF by roughly 5-to-1. That’s the uncomfortable truth. Nvidia isn’t a cautionary tale here—it’s a reminder of the math inherent to diversified funds. When you hold 100 stocks instead of one, you capture broader trends but sacrifice concentration bets.

Yet context matters. Over the same period, IGPT slightly exceeded the Nasdaq-100’s performance. Not spectacular, but respectable for a fund managing diversification responsibilities. The real case for this artificial intelligence ETF isn’t predicated on matching Nvidia’s trajectory—few investments ever will. Instead, it rests on whether the portfolio can compound double-digit annual returns over a decade-plus horizon.

The ingredients appear present. AI infrastructure is expanding globally. Software adoption cycles are accelerating. Enterprise customers are moving from experimentation to production deployment. These conditions historically precede multi-year bull markets in related equities.

The Verdict

This artificial intelligence ETF occupies an increasingly relevant intersection between infrastructure and application. It’s neither a speculation vehicle nor a conservative holding—it’s a conviction play on the belief that artificial intelligence drives enterprise software productivity and economic value creation. For investors with extended time horizons and moderate risk tolerance, the fundamental case for triple-digit gains over 10+ years appears credible, even if it won’t replicate Nvidia’s singular performance.