Nvidia is too overbought, invest in this AI ETF instead

Nvidia (NASDAQ: NVDA) has been one of the best stocks in 2024 on the back of the AI boom. It has jumped over 83% since the start of the year.

However, according to its intrinsic value, it is overvalued by 36%.

So, Saqib Iqbal, a financial analyst at Trading.Biz, thinks this ETF is a better investment opportunity than Nvidia (NASDAQ: NVDA).

• Nvidia (NVDA) has surged 83% in 2024 due to the AI boom but overvalued by 36%.
• Robo Global Robotics and Automation Index ETF (ROBO) can be a good long-term investment in AI tech.
• ROBO offers diversification across 77 stocks, including Nvidia, with none holding more than 1.81% of assets.

He said, “In my opinion, one of the most appealing ETFs with artificial intelligence exposure that could make for a smarter and safer investment than Nvidia could be the Robo Global Robotics and Automation Index ETF (ROBO).

ROBO is appealing because it provides a diverse strategy for investing in firms that explore robotics, automation, and AI. As a result, if the AI bubble bursts, most of the firms in which this ETF invests will be partially or entirely shielded.”

Robo Global Robotics and Automation Index ETF (ROBO) tracks and invests in global companies in robotics, artificial intelligence, and automation technologies.

Even though artificial intelligence (AI) is the centre of attention regarding technological advancements, other technologies, including robotics and automation, are also experiencing significant growth.

There are currently 77 stocks that are part of the Robo Global Robotics and Automation Index ETF, none of which are holdings larger than 1.81% of the invested assets of the fund. Nvidia is one of the 77 holdings of the fund, with a weighting of 1.47%. So, the ETF offers great diversification.

Although the ETF lagged behind other Robotic ETFs, its diversification approach may outperform in various market situations, like as lower interest rates (which we can see in the longer run).

Therefore, if you want to profit from the AI revolution over the long run, the Robo Global Robotics and Automation Index ETF provides a smarter and safer route.