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As AI Becomes Increasingly Physical, Consider THNQ

BY | ETF Database
09/03/2025 | 436 VIEWS
AI investing has been a principal driver of portfolio performance for several quarters, boosting key mega-cap tech firms. Of course, truly investing in AI requires more than simply picking those mega-cap firms. Even tech investing via ETFs can fail to offer the targeted exposure of a proper AI ETF, potentially missing out on a key transition as AI becomes increasingly physical. An ETF like the ROBO Global Artificial Intelligence ETF (THNQ C+) provides exposure to AI infrastructure firms, as well as firms applying AI, to capture the full global value chain of related technologies.  When investors think of AI, they likely think of opportunities related to data centers. However, a potentially larger opportunity is looming as AI has greater physical applications. This is where robotics comes into play.  NVIDIA’s (NVDA) second quarter earnings call last week heralded the arrival of the age of physical AI. The company noted rapid growth of its robotics full-stack platform. NVIDIA sees robotics as a long-term demand driver for its data center platform, given that applications for robotics require far greater compute on the device and in infrastructure.  Physical AI Interaction Can Boost Investing OutlookThis builds on CEO Jensen Huang’s comments from June at the company’s annual shareholder meeting. Huang said then, “We have many growth opportunities across our company, with AI and robotics the two largest, representing a multitrillion-dollar growth opportunity.” While NVIDIA commands significant investor attention, a broader supporting ecosystem of tech enablers is capitalizing on AI opportunities with accelerating end markets. Beyond the AI-enabling semiconductor stack, which includes blue-chip leaders such as Taiwan Semiconductor, AMD, Qualcomm, and MediaTek, key players span multiple subsectors. These include Cloudflare, Snowflake, MongoDB, and Elastic, operating in Network & Security, Big Data Analytics, and Cloud Providers segments. These companies are also holdings of THNQ. Another example within THNQ is Palo Alto Networks (PANW). The firm recently offered to acquire fellow THNQ holding Cyberark (CYBR), which focuses on machine identity. This landmark deal, valued at $25 billion, unites PANW’s leadership in network, cloud, and endpoint security with CYBR’s dominance in identity and privileged access management.  The acquisition positions PANW to offer a comprehensive, end-to-end platform that can secure every identity, whether human, machine, or AI, across the entire enterprise technology stack. When considering a future with billions of robots and devices that will require security, the addressable market is tremendous.  These are just a few examples of the companies within THNQ capitalizing on the growth opportunity at the intersection of AI and robotics.THNQ's Approach to AITHNQ charges a 68 basis point fee to track its index. The ROBO Global Artificial Intelligence Index offers exposure to firms deriving a significant amount of revenue from artificial intelligence. The index operators classify firms as either infrastructure or application and services companies. It further categorizes those companies into areas like big data and analytics, factor automation, and more. THNQ has returned 18.9% YTD with its approach, according to ETF Database data. That has outperformed both its ETF Database Category and FactSet Segment averages in that time. Those averages come in at 14% and 14.8%, respectively, as of August 29. For more on robotics, join our upcoming webcast on Friday, September 5, at 11 a.m. ET, “Mapping the Future of Robotics for Investors: Humanoids in a Multi-Form Factor World.” Register here. Looking for regular updates? Subscribe here for weekly insights on robotics, AI, and healthcare technology, delivered straight to your inbox. For more news, information, and analysis, visit our Disruptive Technology Content Hub. THNQ is the underlying index for the ROBO Global Artificial Intelligence ETF (THNQ) and the L&G Artificial Intelligence UCITS ETF (AIAI.LN). VettaFi is the index provider for THNQ ETF and AIAI.LN, for which it receives an index licensing fee. However, THNQ ETF and AIAI.LN are not issued, sponsored, endorsed, or sold by VettaFi. VettaFi and its affiliates have no obligation or liability in connection with the issuance, administration, marketing, or trading of THNQ ETF and AIAI.LN.

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