Artificial intelligence (AI) is the business of the decade. NVIDIA appeared NASDAQ: NVDA in the name of home. But the commercialization of AI goes beyond NVIDIA. Microsoft NASDAQ: MSFTAlphabet NASDAQ: GOOGLand Meta Platforms NASDAQ: META restructured all of their capital spending issues on AI infrastructure.
However, the S&P 500 has become so heavily weighted with mega-caps that passive index investing now carries more concentration risk than most retail investors realize. In fact, at this point, if investors own an index with a vehicle like the SPDR S&P 500 ETF Trust. NYSEARCA: CHECKthey already have significant exposure to AI. The question is whether that disclosure is intentional, differentiated, and of an adequate size to bear the risk of individual investors.
Here are some ideas about what a working AI playbook could look like
But First, Understand Any Current Exposure
Before buying anything with “AI” in the name, it's important to understand how much exposure there might be to index funds. For example, the SPY ETF has invested about 30% in six companies holding AI headlines.
This is not a criticism of the method; it's just math. Most index funds are market-cap weighted, meaning the bigger the company, the more your dollar eats up. That means that, in recent years, the shares of the Magnificent 7 collectively represent the historical share of the index. If the AI stumbles, the “different” index fund will feel it.
This means that any additional AI exposure must be complementary, not a replacement, and sized accordingly. A reasonable framework that many financial experts recommend to most investors is to hold dedicated AI positions as a satellite asset around the main index, including a thematic exposure of 10% to 15% of the total equity allocation.
Infrastructure Layer
NVIDIA Today
As of 05/29/2026 04:00 PM Eastern
- 52 week interval
- $132.92
▼
$236.54
- Dividend Yield
- 0.02%
- The P/E ratio
- 32.33
- Target Value
- $305.38
With direct exposure, and high confidence in the building phase of AI, the infrastructure layer is the clearest bet. Someone has to make the chips, and right now, NVIDIA's Blackwell GPUs aren't the dominating platform where the entire AI boom is running.
The risks are well-known: NVDA trades at a low price worth years of continued dominance. One disappointing earnings print or a credible competitor can take the stock down violently.
Broadcom NASDAQ: AVGO another popular option. Its custom AI chip business, built around a hyperscaler relationship, offers a different angle on the same infrastructure theme, with a froth of less scaling and a more diversified revenue base that includes network and business software. Neither is a “safe” stock, but for the investor who wants real picks and shovels exposure, one of these two is up for discussion.
Different AI Beneficiary
Microsoft is the least exciting choice on this list, but this is one time when being boring and predictable can be beneficial.
Microsoft Today
As of 05/29/2026 04:00 PM Eastern
- 52 week interval
- $356.28
▼
$555.45
- Dividend Yield
- 0.81%
- The P/E ratio
- 26.80
- Target Value
- $560.88
Its AI business strategy, built on its Azure cloud platform and its deep integration of Copilot throughout the Office environment, gives it something that NVIDIA does not have: a continuous revenue model that does not depend on any single customer's capital spending cycle. Businesses were slow to change productivity software. That attachment is priceless.
Microsoft also gives retail investors exposure to OpenAI's commercial trajectory without access to private markets. The relationship is complex, and the finances are not clear, but the strategic alignment is real.
As of this writing, Microsoft has an attractive valuation relative to its earnings growth. For investors looking for AI exposure that can withstand sector-wide corrections without going to zero, MSFT can be a quality anchor.
The ETF Question—Diversification or Fraud?
Thematic AI ETFs have exploded in value. Products like the Roundhill Generative AI & Technology ETF NYSEARCA: CHAT they position themselves as a one-stop AI exposure. The tone is partly true but can be misleading.
Roundhill Generative AI & Technology ETF Today
Roundhill Generative AI & Technology ETF
As of 05/29/2026 04:10 PM Eastern
- 52 week interval
- $40.97
▼
$98.67
- Assets Under Administration
- $2.01 billion
An honest assessment: many AI ETFs are highly correlated with the Nasdaq 100 and others. Pull up 10 of their holdings, and you will find the same words that you already own by using your index index. “Diversification” buys are often repackaged mega-cap exposures with a thematic label and higher expense ratio.
Where ETFs truly add value is in accessing the middle layer and the international AI layer that is difficult to research and trade individually. Companies like ASML Holding NASDAQ: ASML-one supplier of lithography equipment that makes advanced chips possible-or Japanese robotics games include real things. A well-constructed thematic ETF at this level does something an index fund doesn't.
How Retail Investors Can Build an Intelligent AI Portfolio
This period of income should have put to rest the idea that AI is in a bubble. However, it will not be a sure thing for every stock. Both real technological change and trade congestion at the same time.
Investors who will go public are those who are exposed with a purpose: to know who they are, why they own it, and how much pain they can endure if the timeline is extended or the narrative reverses.
For those with a high risk appetite, AI trading has a strong layer to be understood, even if it is not the core of a long-term position. Memory stocks like Micron Technology NASDAQ: MU have become agents of AI, driven by the growing demand for high-bandwidth memory in GPU clusters,
On the power side, companies like Vertiv (NYSE: VRT ), which provides the power and cooling infrastructure needed by AI data centers around the clock, have emerged as dynamic plays, with metrics that show real demand growth but also great optimism.
So, the working framework looks like this: one infrastructure name, one quality combination, a close look at whether the ETF on the watch list is really diversifying or re-combining the same mega-cap exposure. And for investors who are active enough to manage it, a small, directional allocation to dynamic names like MU or VRT captures the speculative edge of AI trading without letting it define the portfolio.
Before you consider NVIDIA, you'll want to hear this.
MarketBeat tracks Wall Street's top and most effective research analysts and the stocks they recommend to their clients every day. MarketBeat identified five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on… and NVIDIA wasn't on the list.
Although NVIDIA currently has a buy rating among analysts, top analysts believe these five stocks are the best.
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