This AI ETF Shows Why Your AI Portfolio Isn’t Making You Money

The Themes Generative Artificial Intelligence ETF (WISE) illustrates why a broad AI portfolio may fail to deliver strong returns. Launched in December 2023, WISE tracks the Solactive Generative Artificial Intelligence Index, holding 48 companies with a 35-basis-point fee and $31 million in assets. Top holdings include NVIDIA, AMD, and QuickLogic, though the fund’s equal-weight approach limits exposure to high-growth hyperscalers. WISE’s performance lags behind pure-play AI stocks like NVIDIA, which surged 18% year-to-date while WISE fell 4%. Over the past year, NVIDIA rose 62%, compared to WISE’s 14.6% gain. The fund’s structure punishes investors by diluting returns from profitable companies like NVIDIA and AMD with unprofitable AI startups, such as BigBear.AI and Gorilla Technology. NVIDIA’s dominance in AI infrastructure is clear: Q4 2026 revenue hit $68.13 billion, up 73% YoY, with $96.58 billion in free cash flow. CEO Jensen Huang called AI demand ‘exponential,’ while AMD’s data center revenue grew 57% YoY. WISE’s smaller allocations to these leaders drag down overall returns. The software side of AI remains weak, with Microsoft’s Azure AI revenue growing 123% YoY but the stock down 10% as investors question capex-heavy AI spending. Smaller AI software firms show slow growth and losses, making them poor long-term bets. WISE’s equal-weight strategy forces investors to accept three key tradeoffs: limited upside from top performers, exposure to struggling startups, and underperformance against focused AI plays. The fund delivers broad exposure but fails to capitalize on the clear winners in AI infrastructure.