AI will likely be ubiquitous by the time today's children reach adulthood in the mid-2030s. This technology-focused fund captures the leaders in advanced compute across software, semiconductors, and IT services.
Vanguard Information Technology ETF and Technology Select Sector SPDR Fund have soared, but both are highly concentrated in a few mega-cap tech stocks. VGT and XLK face risks from high valuations, economic headwinds, and potential reversals in the AI-driven rally, making them vulnerable to significant pullbacks. I recommend investors reduce exposure to these tech ETFs and consider rebalancing portfolios, as the S&P 500 and small-cap value funds may offer better risk-reward.
Vanguard funds charge low management fees and can make for ideal long-term investments. The Vanguard Information Technology Index Fund ETF can position investors for strong gains from the tech sector.
The technology sector has delivered powerful performance in 2025, with transformative trends such as artificial intelligence driving significant market gains. For many investors, the desire to participate in this growth is strong, but the landscape presents a clear challenge.
Vanguard Information Technology Index Fund ETF Shares (VGT) earns a buy rating due to strong earnings growth and robust US economic outlook. The US stock market's uptrend is fueled by better-than-expected earnings, Fed rate cuts, and resilient GDP growth, despite trade war concerns. Technology sector momentum is driven by AI innovation, with mega caps like NVDA, MSFT, AAPL, and AVGO expected to deliver significant earnings growth.
October doesn't have to be a scary month if you're properly positioned with exchange traded funds (ETFs).
Vanguard Information Technology Index Fund ETF is an essential, diversified tech holding, outperforming benchmarks and capturing sector evolution. VGT's market-cap weighting ensures top performers like NVDA drive returns, while its broad holdings offer exposure to emerging tech leaders. Compared to XLK and IYW, VGT balances risk and reward, making it my preferred vehicle for long-term technology sector exposure.
VGT offers broad IT sector exposure, but is heavily weighted toward NVDA and top 10 holdings, reducing true diversification. NVDA's growth is in line with consensus, but buybacks and conservative guidance could lead to positive EPS surprises; focus should shift to the health of the software segment. Software companies within VGT show solid earnings and revenue growth, supporting ongoing AI-driven infrastructure investment and sector resilience.
Launched on January 26, 2004, the Vanguard Information Technology ETF (VGT) is a passively managed exchange traded fund designed to provide a broad exposure to the Technology - Broad segment of the equity market.
I upgrade VGT to a long-term buy due to its strong fundamentals, robust earnings, and leadership in tech innovation. VGT offers broad, pure tech exposure with low expenses and diversification beyond the dominant NVDA, MSFT, and AAPL holdings. The top three holdings generate massive free cash flow and continue to drive sector growth, especially with AI and cloud tailwinds.
Key Points in This Article: Vanguard Information Technology ETF‘s (VGT) 22.6% annualized return over the past decade outpaces the S&P 500, but its 43% weighting in just three stocks heightens risk.
When the market is on a tear, it's tempting to sit back and wait for a pullback. But smart investors know that the best strategy isn't timing the market -- it's time in the market.