Capital has largely flowed into semiconductor companies tied to generative AI, driving strong performance in semiconductor-focused funds. Software companies that convert compute into applications, model services, and enterprise platforms have lagged behind that momentum. Three software-oriented ETFs target this second wave: IGPT, CHAT, and ARTY. IGPT uses an index with an explicit software mandate. CHAT is an actively managed, concentrated portfolio focused on companies building and selling generative AI products. ARTY combines emerging AI software startups with semiconductor exposure, creating a more full-stack tilt. The software layer has been quieter because enterprise spending shifts toward AI infrastructure first, while software adoption remains a “show me” story and IT budget reallocation concerns persist.
"The software layer, where applications, model providers, and enterprise platforms turn raw compute into recurring revenue, has trailed that narrative. For investors looking specifically at that second wave, three ETFs stand out: Invesco AI and Next Gen Software ETF (NASDAQ:IGPT), Roundhill Generative AI & Technology ETF (NYSEARCA:CHAT), and iShares Future AI & Tech ETF (NYSEARCA:ARTY). Each fund routes investor capital into the software side of generative AI through a different mechanism."
"IGPT carries an explicit software mandate baked into its index, while CHAT is an actively managed, concentrated bet on the names building and selling generative AI products. Finally, ARTY blends emerging AI software startups with semiconductor exposure, sitting closer to a full-stack approach. Sorting which one fits a given portfolio comes down to how pure a software tilt the investor actually wants."
"The chip-buying phase of the AI build-out is visible in capex disclosures and earnings calls. Outlooks from Goldman Sachs, JPMorgan, PineBridge, and Vanguard for 2026 all describe AI infrastructure as the dominant growth engine, with hyperscalers investing heavily in datacenter expansion. PineBridge notes that software remains a “show me” story, with AI-driven disruption and the potential reallocation of IT budgets posing persistent concerns."
"Once enterprise budgets reallocate toward AI-enabled software, the funds carrying those names benefit from a layer of the stack that has not yet been fully priced in. Ultimately, it's the hardware-heavy funds like SOXX that capture the first leg, but it's the three ETFs below that capture the second."
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