Why This AI ETF Could Deliver 300% Returns Without the Nvidia Hype

An Overlooked Growth Engine

The Invesco AI and Next Gen Software ETF (NYSEMKT: IGPT) represents something rare in today’s crowded AI investment space: a diversified portfolio that doesn’t need to replicate Nvidia’s explosive trajectory to generate substantial wealth. With $652 million in assets under management and two decades of operational history, this fund has quietly transformed itself into a compelling vehicle for capturing AI’s broader ecosystem.

Here’s the paradox: while investors obsess over individual mega-cap winners, this AI ETF quietly assembled the ingredients for meaningful long-term appreciation. Between 2024 and 2025, despite trailing Nvidia by a significant margin, the fund managed to outpace the Nasdaq-100 index—a feat that shouldn’t be dismissed when examining the fund’s true potential.

From Software Focus to AI Powerhouse

The fund’s evolution tells an important story about market adaptation. Originally conceived as a software-focused investment vehicle, Invesco AI and Next Gen Software ETF underwent a strategic repositioning in June 2023, aligning its index and naming to emphasize artificial intelligence exposure. This transformation reflects the real-world convergence happening across technology sectors.

The portfolio structure reveals sophisticated positioning. Allocating over 43% to semiconductor stocks while maintaining substantial representation among cloud infrastructure providers, this AI ETF captures multiple dimensions of the artificial intelligence revolution. Yet it hasn’t abandoned its software heritage entirely—and that’s actually a significant advantage.

Charging just 0.56% annually, the fund distributes capital across 100 holdings spanning 17 different industries. This breadth provides the diversification that shields investors from single-name risks while preserving meaningful upside potential.

Betting on the AI-Software Intersection

The most compelling investment thesis centers on companies positioned at the nexus of software innovation and AI development. Adobe exemplifies this opportunity. As a top 10 holding within the AI ETF, the creative software giant has systematically embedded AI capabilities throughout its product ecosystem. During December’s fiscal fourth-quarter earnings call, CEO Shantanu Narayen emphasized “accelerating adoption of our AI-driven solutions” and the company’s “pivotal role in establishing the global AI ecosystem.”

Snowflake represents another strategic positioning in this space. The data platform company has engineered an intelligent approach to customer retention and expansion. Its Cortex offering—an AI-powered innovation—enables customers to construct applications using data infrastructure they already maintain, effectively deepening existing client relationships while creating pathways to acquire new business.

These holdings demonstrate why this diversified AI ETF can thrive independently of any single stock’s performance. Multiple companies are driving innovation across different layers of the artificial intelligence stack.

The Real Growth Opportunity Ahead

Skeptics might rightfully note that this portfolio probably won’t replicate Nvidia’s extraordinary returns. That assessment, while accurate, misses the essential point: exceptional gains don’t require matching a once-in-a-generation performer.

Goldman Sachs research suggests the AI-powered customer service software market could expand between 20% and 45% through 2030. The upper-bound projection implies annual expansion rates exceeding broader software industry forecasts—creating a tailwind specifically benefiting this AI ETF’s holdings.

Beyond customer service applications, emerging innovations in autonomous AI agents could stimulate additional growth vectors. Software developers represented within this ETF are actively solving adoption barriers that currently constrain enterprise AI deployment. As these technical obstacles diminish, the fund’s holdings stand to capture accelerating demand.

The Investment Verdict

While this Invesco AI and Next Gen Software ETF won’t necessarily deliver Nvidia-sized returns, the fundamental growth drivers are demonstrably present. The combination of semiconductor exposure, software innovation, and strategic positioning within high-growth segments creates realistic potential for triple-digit gains across extended investment horizons.

The advantage of this AI ETF lies precisely in what makes it overlooked: reasonable valuations, proven business models from its major holdings, and exposure to secular trends that will likely persist for years to come.