How to invest in AI stocks & ETFs: your complete guide

What is AI investing?

Investing in AI means allocating capital to companies that develop, deploy, or benefit significantly from artificial intelligence technology. It's a broad theme, covering everything from the chip designers building the hardware foundation to the cloud platforms hosting AI workloads, as well as the software companies turning AI into products.

Unlike traditional sector investing, AI cuts across multiple industries. A healthcare company using machine learning to accelerate drug discovery is an AI play. So is a logistics firm using AI to optimise its supply chain. The theme is defined less by industry and more by the depth and centrality of AI to a company's growth. In other words, there’s a distinction to be made between pure play AI companies such as Nvidia, ones that are incorporating AI into their services (Google), and companies that simply use AI.  

For UK investors, access to AI stocks is broad. Most of the leading AI companies are US-listed and accessible via share dealing accounts, stocks and shares ISAs, or as CFD/spread bet positions through IG (plus AI ETFs). The value of investments can fall as well as rise, and you may get back less than you invested. Your capital is at risk.

AI investing in numbers

Sources: Quantumrun Foresight, Nvidia, IG

Ways to invest in AI

There are several routes into the AI theme, each with different risk profiles, costs, and levels of diversification.

Individual AI shares

Buying shares in individual AI companies gives you direct, concentrated exposure. The best-known names include:

1. Nvidia (NVDA) – the dominant supplier of GPUs used to train and run AI models. Its data centre revenue more than doubled in FY2025.
2. Microsoft (MSFT) – deeply integrated with OpenAI, with AI woven into Azure, Microsoft 365, and GitHub Copilot.
3. Alphabet (GOOGL) – owner of DeepMind and Google Cloud, with AI embedded across Search, YouTube, and enterprise services.
4. Amazon (AMZN) – AWS provides AI infrastructure to thousands of businesses; its own AI tools generate growing enterprise revenue.
5. Meta (META) – investing heavily in AI for its advertising platform and developing open-source models like Llama.
6. ARM Holdings (ARM) – chip architecture company whose designs power a growing share of AI edge devices and smartphones.

Buying individual shares means your returns depend entirely on how those specific companies perform. The upside can be significant – but so can the downside if a company misses on earnings or the AI narrative shifts. 

AI ETFs

An AI ETF is a fund that holds a basket of AI-related companies, traded on an exchange just like a share. ETFs give you diversified exposure across multiple AI companies in a single trade, reducing the risk that any one company's underperformance wipes out your returns.

Popular AI ETFs available to UK investors include:

ETFs typically carry lower fees than actively managed funds and don't require you to pick individual winners – see the individual fund sheet for up-to-date data.

For an introduction to ETFs, see our guide on investing in ETFs.

IG's AI thematic basket

IG's thematic basket lets you trade or invest in a curated index of AI-related companies in a single position – similar to an ETF, but traded as a spread bet or CFD. It tracks a basket of companies across AI hardware, software, and services, weighted by their relevance to the AI theme.

This approach suits traders and investors who want AI exposure without having to build a portfolio stock by stock. It also lets you go short on the basket if you expect AI valuations to correct, something you can't easily do with a standard ETF.

Spread bets and CFDs on AI stocks

For shorter-term positions, spread betting and CFD trading allow you to speculate on the price movements of AI stocks without owning the underlying shares. Both are leveraged instruments – meaning you can gain exposure to a larger position with a smaller deposit, but losses can exceed your initial outlay.

Spread betting profits are normally exempt from UK capital gains tax and stamp duty, which can make it an efficient vehicle for eligible UK traders. Tax treatment depends on individual circumstances and may be subject to change. 

Spread betting is a high-risk strategy, making risk management tools such as stop loss orders an essential way to protect investors against losses past a certain level.

Not yet ready to invest with real money? Our demo account lets you explore AI markets at your own pace, using up to £10,000 in virtual funds to practice in a non-live setting.

How to invest in AI stocks with IG

Whether you're buying shares for the long term or taking a short-term trading position, going live with us follows the same basic steps.

1. Open an account

Once you’re comfortable using the demo account, create a live share dealing account, stocks and shares ISA, or trading account.

2. Search for your market

Find the AI stock, ETF, or thematic basket you want. You can browse the thematic section or search by ticker or name.

3. Decide how much to invest

For share dealing, enter the number of shares or the value you want to invest. For spread bets and CFDs, decide your position size and check your margin requirement.

4. Review and manage risk

Proper risk management is an essential part of trading and investing. Set any stop-loss orders or take-profit levels, and check the total exposure before you confirm.

5. Open your position

Once confirmed, monitor it via the IG app or platform. Adjust or close when it suits your strategy.

Risks of investing in AI stocks

The AI theme carries genuine growth potential, but also some of the most elevated valuations in the market. Understanding the risks is just as important (if not more so) as understanding the opportunity.

Valuation risk

AI stocks trade at high price-to-earnings multiples, pricing in years of future growth. If that growth disappoints, share prices can fall sharply.

Concentration risk

The AI narrative is currently dominated by a small number of companies, particularly in semiconductors. A single earnings miss from Nvidia can move the whole sector.

Regulatory risk

Governments in the US, EU, and UK are developing AI regulation. New rules could add costs, restrict applications, or reshape the competitive landscape.

Competition risk

The AI race is fast-moving. Today's leaders face challenges from well-funded rivals and from hyperscalers building their own chips to reduce dependence on third parties.

Leverage risk

If you're trading AI stocks via spread bets or CFDs, leverage means losses can exceed your initial deposit. Use stop-losses and manage position sizes carefully.

For more on managing investment risk, see our guide on risk tolerance and why it matters.

AI shares vs AI ETFs vs trading on price

Not sure which approach is right for you? Here's how the main options compare.

*Spread betting profits are normally exempt from UK capital gains tax and stamp duty. Tax laws can change. Tax treatment depends on individual circumstances.

AI investing FAQs