The Best ETFs to Buy After the AI Stock Selloff
The Artificial Intelligence (AI) sector experienced a necessary **cooling period** in late $\text{2025}$, driven by profit-taking and concerns over valuations in the chip and infrastructure mega-caps. For long-term investors, this volatility presents a prime **buying opportunity**. The key is to move beyond single-stock concentration and embrace diversification through specialized ETFs that target the full AI ecosystem—from software and robotics to smaller, less-hyped infrastructure players.
The Post-Selloff Strategy: Diversify the AI Stack
A smart rebound strategy involves shifting capital away from the few stocks that drove the initial frenzy and into funds that capture the **"application layer"** of AI—where the real long-term productivity gains will occur.
1. Broad AI Exposure: The Core Holding
For foundational exposure to the entire AI development and utilization spectrum, a broad-based ETF is essential. This category often includes both the mega-cap hardware leaders (like Nvidia and Broadcom) and the software platforms (like Alphabet and Palantir), but with capped weightings to reduce single-stock risk.
Top Pick: Global X Artificial Intelligence & Technology ETF (AIQ)
- **Focus:** Tracks companies that are developing or utilizing AI technology across various sectors (healthcare, industrials, cloud).
- **Benefit Post-Selloff:** Holds a diverse range of companies, including international leaders (Alibaba, Samsung), providing resilience when U.S. mega-cap tech corrects. Its broader mandate mitigates risk associated with the volatile chip sector alone.
2. The Application Layer: AI Software & Robotics
This is where the massive investment in AI infrastructure is finally turning into actual products and services. These ETFs focus on the companies making, using, and selling AI-enabled solutions, which often have higher growth visibility in the long term.
Top Pick: Global X Robotics & Artificial Intelligence ETF (BOTZ)
- **Focus:** Concentrates on robotics, industrial automation, and autonomous systems. This area is less tied to quarterly chip shipments and more to long-term industrial adoption.
- **Benefit Post-Selloff:** Provides exposure to the physical manifestation of AI (e.g., Intuitive Surgical, Keyence), acting as a counter-balance to pure software or chip volatility.
3. AI Infrastructure Beyond the Giants (Small/Mid-Cap Play)
The highest growth potential often lies in the small- to mid-cap companies providing crucial components, specialized software, and data engineering services to the tech giants. These companies were often unfairly sold off alongside the mega-caps, presenting deep value.
Strategy: Active Small/Mid-Cap Tech ETFs
- **Focus:** Look for actively managed Small-Mid Cap (SMID-Cap) growth ETFs (like **T. Rowe Price Small-Mid Cap ETF - TMSL** or similar) that have large weightings in companies essential to the AI supply chain (e.g., Rambus, MKS Instruments, UiPath).
- **Benefit Post-Selloff:** Active funds can specifically target small-cap innovators with strong earnings growth tied to AI demand, such as those providing data engineering services or specialized power management for data centers (like Navitas Semiconductor, which was recently volatile but tied to Nvidia's next-gen architecture).
The Volatility Option: ARK Autonomous Tech & Robotics ETF (ARKQ)
For investors with a high risk tolerance seeking maximum potential rebound, active thematic ETFs like those managed by ARK Invest offer highly concentrated exposure to disruptive innovation.
- **Why ARKQ?** This fund focuses heavily on autonomous technology, robotics, and next-generation infrastructure, which are core pillars of applied AI. While highly volatile (it amplifies market movements), it is positioned to soar if the AI optimism returns strongly in $\text{2026}$.
Investing in thematic ETFs, especially those focused on disruptive technology like AI, involves high volatility and risk. A market correction is a time to invest with conviction, but always maintain diversification across your entire portfolio.
Download our free $\text{2026}$ AI Investing Checklist to ensure you are balanced across AI hardware, software, and services.
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