Nvidia and Palantir's Collaboration Could possibly Propel this Indispensable ETF, Transforming a $1,000 Monthly Income into a Potential $1 Million over a Long-term Period.
The iShares Expanded Tech Sector ETF (IGM), a popular investment choice among tech enthusiasts, has been outperforming the S&P 500 since its inception in 2001. With a compound annual return of approximately 10.4%, IGM has comfortably surpassed the S&P 500’s average returns over the same period.
This outperformance is attributed to IGM's exposure to dominant technology and tech-related companies, particularly within the artificial intelligence (AI) sector. The ETF's diversification could support its returns, even if AI companies lose steam or if the technology fails to live up to expectations.
IGM's risk and volatility are higher than the S&P 500, with a beta of 1.26, meaning it tends to amplify market movements about 26% more than the broader index. This factor implies a higher risk but also the potential for outsized returns in bullish market conditions.
The ETF's top holdings include key companies at the forefront of AI and technology innovation. Notably, Nvidia (NVDA) and Palantir Technologies (PLTR) have outperformed the broader market over the last five years. Other top holdings include Meta Platforms (Facebook), Netflix, Palo Alto Networks, CrowdStrike, Intuit, Shopify, and Datadog.
Palantir Technologies, an AI software company, reported a revenue growth of 29% last year, and Wall Street's consensus estimate suggests its growth rate could accelerate to 35% in 2025. Palantir's platforms, such as Gotham, Foundry, and AIP, help organizations and governments analyse large volumes of data.
Nvidia's surging demand comes from the data center, where its graphics processing units (GPUs) are the most powerful for developing AI models. The latest 'reasoning' models consume up to 1,000 times more computing capacity than traditional large language models (LLMs), supporting sales of Nvidia's Blackwell and Blackwell Ultra chips for the foreseeable future.
The iShares ETF has attracted significant investor interest, with $250 million in net new assets in Q2 2025, bringing its total assets under management to approximately $6.4 billion. It carries a moderate expense ratio of 0.41%, reflecting a balance between specialized tech exposure and cost efficiency.
Over the last 10 years, IGM has generated an accelerated yearly gain of 18.7%, thanks to the rapid adoption of technologies like cloud computing, enterprise software, and AI. With its top holdings including Microsoft, Nvidia, Meta Platforms, Alphabet, Apple, Broadcom, Netflix, Oracle, Palantir Technologies, and Cisco Systems, IGM presents a strong growth-oriented investment in technology, especially AI, with a track record of outperforming the S&P 500 but with higher volatility suited for investors with a bullish outlook on the tech sector.
One analyst, Dan Ives from Wedbush Securities, thinks Palantir's market capitalization could triple to $1 trillion. While such a prediction remains to be seen, it underscores the potential for growth within the AI sector and the iShares Expanded Tech Sector ETF (IGM).
[1] https://www.ishares.com/uk/individual/en/products/266343/ishares-expanded-tech-sector-etf [2] https://www.ishares.com/us/products/236649/ishares-expanded-technology-and-technology-sector-etf [3] https://www.ishares.com/us/insights/2021/08/24/ishares-expanded-tech-sector-etf-igm-a-diverse-portfolio-for-tech-growth-investors [4] https://www.ishares.com/us/insights/2021/08/24/ishares-expanded-tech-sector-etf-igm-a-diverse-portfolio-for-tech-growth-investors#:~:text=Since%20its%20inception%20in%202001,the%20S%26P%20500%E2%80%99s%20average%20annual%20return%20of%208.3%25%20over%20the%20same%20period.
- By investing in the iShares Expanded Tech Sector ETF (IGM), individuals are exposed to dominant technology and tech-related companies, including those within the artificial intelligence (AI) sector, enabling potential growth in their finance and money.
- One of IGM's top holdings, Palantir Technologies, a prominent AI software company, has the potential to accelerate its growth rate from 29% to 35% by 2025, making it an attractive investment option for those interested in tech financing and technology-focused ventures.
- With a strong focus on AI and technology innovators, the iShares Expanded Tech Sector ETF (IGM) presents a significant growth-oriented investment opportunity, boasting an impressive 18.7% yearly gain over the past decade and a high potential for outperforming the S&P 500, despite its higher volatility, making it suitable for investors with a bullish outlook on tech finance and technology sectors.
