Riding the Tech Surge: Top 3 High-Momentum ETFs to Watch

October 31, 2025

The technology sector continues to dominate market gains in 2025, delivering nearly 28% year-to-date returns, outpacing the broader S&P 500’s 17% increase. This impressive performance, particularly among leading tech giants, has ignited debate among investors regarding a potential AI-related market bubble. Despite these concerns, tech stocks and related Exchange-Traded Funds (ETFs) are providing significant returns for investors.

The Rise of Tech ETFs

Several tech-focused ETFs have not only matched but exceeded the sector’s overall performance, thanks to their distinct investment strategies. While past performance doesn’t guarantee future success, the ongoing boom in artificial intelligence and related industries suggests this positive momentum could persist. Investors are carefully evaluating which funds are best positioned to capitalize on this trend.

Spotlight on Three Leading Tech ETFs

Here’s an in-depth look at three prominent etfs currently capturing investor attention:

1. iShares Cloud Computing ETF (SKYY) – Pioneering the Cloud

The iShares Cloud Computing ETF, known as SKYY, was among the first ETFs to concentrate specifically on the cloud computing industry in the United States. With approximately $3.3 billion in assets under management and a history spanning over a decade, SKYY has established itself as a significant player. However, its specialized focus results in comparatively lower average monthly trading volumes, around 156,000 shares.

SKYY’s portfolio comprises under 70 holdings, with its top 10 positions representing nearly 40% of its total assets. These holdings include major tech companies with substantial cloud computing operations, alongside specialized cloud firms. This strategy allows SKYY to benefit from overall sector growth but may dilute its exposure to purely cloud-focused companies. Recent gains in the tech sector have propelled SKYY’s value up around 35% in the last six months, making its 0.60% annual fee appealing to many investors.

2. Global X Artificial Intelligence & Technology ETF (AIQ) – A Broader AI Focus

The Global X Artificial Intelligence & Technology ETF (AIQ) has seen substantial growth, boasting an asset base more than double that of SKYY and over ten times its trading volume. AIQ adopts a dual approach to AI investment, targeting companies that provide the essential hardware for AI progress and broader firms poised to benefit from advancements in AI across various sectors.

Approximately 71% of AIQ’s holdings fall within the facts technology sector, but it also includes exposure to consumer discretionary, communication services, and industrial companies. Compared to SKYY, AIQ’s investment scope is more expansive, encompassing companies from multiple developed markets; however, US firms still constitute over two-thirds of the nearly 90-company portfolio. Within the last six months,AIQ has increased by nearly 44%,with an expense ratio of 0.68%.

3.First Trust Technology AlphaDEX ETF (FTEC) – diversification at a Low Cost

The First Trust Technology AlphaDEX ETF (FTEC) stands out for its low cost, with an annual fee of just 0.08%. This broad-based tech sector fund holds approximately 300 different companies. Though, FTEC’s diversification comes with a caveat: its top three holdings account for approximately 42% of its total assets.

Managing nearly $17 billion in assets, FTEC is the largest of the three funds discussed. Still, its trading volume is more akin to SKYY than AIQ, potentially raising liquidity concerns for some investors. FTEC’s performance has been remarkable,surging over 45% in the past six months. This makes FTEC a strong choice for long-term investors seeking broad exposure to the technology sector.

ETF	Expense Ratio	assets Under Management (Approx.)	6-Month Performance (Approx.)	Number of Holdings
SKYY	0.60%	$3.3 billion	35%	Under 70
AIQ	0.68%	$6.6 billion	44%	nearly 90
FTEC	0.08%	$17 billion	45%+	Around 300

Did You Know? The AI market is projected to reach $1.84 trillion by 2030, offering significant growth potential for investors.

Pro Tip: Consider your risk tolerance and investment horizon when selecting a tech ETF. A diversified approach can mitigate risk.

Understanding the Risks and Rewards of Tech ETF Investment

Investing in tech etfs, while potentially lucrative, isn’t without risk. Market volatility, particularly in emerging fields like AI, can lead to significant fluctuations in value. Understanding the expense ratios, diversification levels, and underlying holdings of each ETF is crucial before making an investment decision. Diversification is key to mitigating risk, and regularly reviewing your portfolio to align with your financial goals is essential.The tech sector, while currently thriving, is subject to changing trends and regulatory landscapes, requiring ongoing vigilance.

Frequently Asked Questions About Tech ETFs

• What is a tech ETF? A tech ETF is an exchange-traded fund that invests in a basket of technology companies, offering diversified exposure to the sector.
• Are tech ETFs a good investment in 2025? Given the current growth of the tech sector and AI, tech ETFs present a promising investment prospect, but it’s essential to assess individual fund characteristics.
• What is the expense ratio of a tech ETF? The expense ratio is the annual fee charged to manage the ETF, varying between funds (e.g., 0.08% for FTEC, 0.60% for SKYY).
• How diversified is a tech ETF? Diversification levels vary; some ETFs like FTEC hold hundreds of companies, while others like SKYY are more concentrated.
• What is the role of AI in the performance of tech ETFs? The rapid growth of AI is a significant driver of the current boom in the tech sector and is boosting the performance of many tech ETFs.
• Is there a risk of a tech bubble? The substantial gains in the tech sector have led to concerns about a potential bubble, warranting cautious evaluation of investment options.
• Where can I find more information about these ETFs? You can find detailed information about each ETF on their respective fund provider websites, such as iShares, Global X and First Trust.

What are your thoughts on the future of tech ETFs, given the expansion of Artificial Intelligence? Do you think these funds represent a secure investment?

Share your outlook in the comments below, and don’t forget to share this article with your network!

What are the potential downsides of investing in cloud computing ETFs like CLOU, considering the competitive landscape and valuation of cloud stocks?

Understanding Tech ETF Momentum

In the fast-paced world of investing, identifying sectors with strong upward trajectories is crucial. Currently, the technology sector continues to demonstrate meaningful momentum, driven by innovations in artificial intelligence (AI), cloud computing, cybersecurity, and the ongoing digital change across industries. Exchange-Traded Funds (ETFs) offer a streamlined way to capitalize on this growth. But with so many options,pinpointing the right ETFs requires careful consideration. This article highlights three high-momentum tech ETFs poised for continued success, focusing on their performance, holdings, and potential risks. We’ll explore options for both broad tech exposure and more specialized strategies, helping you build a robust tech stock portfolio.

1. Invesco QQQ Trust (QQQ) – the Nasdaq 100 Powerhouse

The Invesco QQQ Trust (QQQ) is arguably the most well-known tech-focused ETF. It tracks the Nasdaq 100 Index, which comprises the 100 largest non-financial companies listed on the Nasdaq exchange.

* key Features:

* Expense Ratio: 0.20% – Relatively low cost for broad market exposure.

* Top Holdings: Apple, Microsoft, Amazon, Nvidia, Alphabet (Google). These giants heavily influence QQQ’s performance.

* Performance (YTD 2025): +28.5% (as of October 31, 2025). Demonstrates strong year-to-date gains.

* Assets under Management (AUM): $65 Billion – High AUM indicates strong investor confidence and liquidity.

* Why it’s high Momentum: The Nasdaq 100 is heavily weighted towards technology, making QQQ a direct play on the sector’s growth. The dominance of mega-cap tech companies provides stability while still offering substantial upside potential. It’s a popular choice for growth investing and long-term capital thankfulness.

* Risk Considerations: Concentration risk – a significant portion of the ETF’s value is tied to a handful of companies. Market corrections impacting the Nasdaq can significantly affect QQQ’s performance.

2.iShares semiconductor ETF (SOXX) – Riding the Chip Wave

The iShares Semiconductor ETF (SOXX) focuses on the semiconductor industry, a critical component of the technology sector.Semiconductors are the building blocks of modern electronics, and demand is soaring due to advancements in AI, 5G, and the Internet of Things (IoT).

* Key Features:

* Expense Ratio: 0.40% – Higher than QQQ, reflecting the specialized nature of the sector.

* Top Holdings: Taiwan Semiconductor Manufacturing (TSMC), Nvidia, ASML Holding, Qualcomm.

* Performance (YTD 2025): +42.1% (as of October 31, 2025). Outperforming broader tech indices.

* AUM: $9.2 Billion – Solid AUM, indicating growing investor interest.

* Why it’s High momentum: The global semiconductor shortage of 2023-2024 highlighted the industry’s importance and spurred significant investment. Continued innovation and increasing demand are driving strong growth. This ETF is ideal for investors seeking exposure to the semiconductor industry and the chip shortage recovery.

* Risk Considerations: Cyclicality – the semiconductor industry is prone to cyclical booms and busts. Geopolitical risks, particularly related to Taiwan, can significantly impact the sector. High valuation multiples.

3. Global X Cloud Computing ETF (CLOU) – The Future is in the Cloud

The Global X Cloud Computing ETF (CLOU) provides targeted exposure to companies involved in cloud computing, a rapidly expanding segment of the technology sector. Cloud computing is transforming how businesses operate, offering scalability, cost savings, and increased efficiency.

* Key features:

* Expense Ratio: 0.65% – Highest expense ratio of the three, justified by the niche focus.

* Top Holdings: Amazon, Microsoft, Salesforce, Adobe, Oracle.

* Performance (YTD 2025): +35.7% (as of October 31, 2025). Demonstrates strong growth aligned with cloud adoption.

* AUM: $3.5 Billion – Growing AUM reflects increasing investor interest in cloud technology.

* why it’s High Momentum: The shift to cloud computing is accelerating, driven by the need for remote work solutions, data analytics, and digital transformation. CLOU offers a focused approach to capitalize on this trend. It’s a strong option for investors interested in cloud technology, SaaS (Software as a Service), and digital transformation.

* Risk Considerations: competition – the cloud computing market is becoming increasingly competitive. Valuation – cloud stocks frequently enough trade at premium