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FAI vs VGT
Which ETF would AI Choose? First Trust Bloomberg Artificial Intelligence ETF (FAI) vs. Vanguard Information Technology ETF (VGT)
Key Takeaways
- FAI is a concentrated, thematic pure-play on artificial intelligence (AI), while VGT is a broad, diversified technology-sector fund that includes AI leaders but also legacy hardware, software, and semiconductor names.
- VGT holds roughly 320 securities versus about 50 to 60 for FAI, giving VGT materially greater breadth and lower single-stock concentration risk.
- VGT carries a significantly lower expense ratio (0.09%) compared with FAI (0.65%), a structural cost advantage that compounds over time.
- FAI offers more direct exposure to AI-specific revenue and includes meaningful international holdings, while VGT is almost entirely U.S.-focused.
- Both funds are top-heavy in mega-cap technology names such as NVDA, MSFT, and AVGO, but FAI leans more heavily on AI infrastructure and semiconductor supply-chain players.
- Tickeron AI Verdict: VGT — its lower cost, broader diversification, deeper liquidity, and longer track record give it the stronger structural profile for most investors.
Introduction
Artificial intelligence has become the dominant investment theme of the current market cycle, drawing record capital flows into semiconductor, cloud, and software companies. Within this landscape, the First Trust Bloomberg Artificial Intelligence ETF (FAI) and the Vanguard Information Technology ETF (VGT) both attract investors seeking technology exposure, yet they represent fundamentally different approaches. FAI is a narrowly focused, thematic fund built specifically around AI revenue, while VGT is a broad, low-cost information technology sector fund that captures AI leaders as part of a much wider portfolio. Comparing the two clarifies whether investors are better served by concentrated thematic purity or by diversified, cost-efficient sector exposure.
First Trust Bloomberg Artificial Intelligence ETF (FAI) Overview
FAI is a passively managed thematic ETF that tracks the Bloomberg Artificial Intelligence Select Index. Launched in November 2024, the fund selects approximately the top 50 to 60 companies globally based on a combination of market capitalization and a "Revenue Assessment" derived from Bloomberg Intelligence data, identifying firms whose products and services are tied to artificial intelligence. The fund is non-diversified and market-cap weighted, with a portfolio turnover of roughly 10%, reflecting relatively stable positioning.
The portfolio is concentrated in the technology sector (roughly 76% to 82%), with smaller allocations to communication services (around 11% to 13%) and consumer cyclical (around 7% to 9%). Top holdings include MSFT, NVDA, AMZN, AVGO, GOOGL, PLTR, META, and AMD, with meaningful exposure to international semiconductor suppliers such as TSMC and ASML. FAI carries a net expense ratio of 0.65%, reflecting the higher cost typical of specialized thematic strategies.
Vanguard Information Technology ETF (VGT) Overview
VGT is a passively managed sector fund that tracks the MSCI US Investable Market Information Technology 25/50 Index. Launched in 2004, it is one of the largest and most established technology ETFs, with assets under management (AUM) well above $100 billion. The index includes large-, mid-, and small-cap U.S. companies classified within the information technology sector under the Global Industry Classification Standard (GICS), resulting in a portfolio of roughly 320 holdings.
Technology represents approximately 99% of the fund, with nearly all remaining assets spread thinly across financials and industrials. Top holdings are heavily weighted toward mega-cap names, including NVDA, AAPL, MSFT, AVGO, and MU, followed by AMD, CSCO, PLTR, INTC, and LRCX. VGT's net expense ratio is just 0.09%, among the lowest in the technology ETF category.
Industry and Thematic Backdrop
Both funds operate within the broader technology and AI investment cycle, which continues to be shaped by rapid growth in data-center infrastructure, accelerating enterprise adoption of generative AI, and surging demand for advanced semiconductors and memory. Capital expenditure from hyperscale cloud providers has remained a key driver for companies such as NVDA, MSFT, and AMZN, supporting revenue growth across the AI supply chain. At the same time, the sector faces risks including elevated valuations, potential export controls on advanced chips, and sensitivity to interest-rate expectations, which influence the discount rates applied to high-growth equities. Investor rotation between AI infrastructure names, legacy software, and cyclical semiconductor businesses has created meaningful divergence between concentrated thematic funds and broader sector funds.
Performance and Positioning Comparison
In recent weeks and months, both FAI and VGT have benefited from strong AI-related earnings momentum, though their performance drivers differ. FAI's tighter focus on AI-specific revenue has made it more sensitive to semiconductor cycles and memory pricing, as reflected in its heavier exposure to companies such as MU, AMD, and international suppliers like SK hynix and TSMC. VGT, by contrast, derives a larger share of its return from diversified software, hardware, and networking franchises, including AAPL and CSCO, which can temper downside during AI-specific corrections. As a newer, smaller, and more concentrated fund, FAI generally exhibits higher volatility and wider relative swings than VGT, whose deeper liquidity and broader base provide more stable relative positioning across market cycles.
AI Screener
Tickeron's AI Screener is an AI-powered stock and ETF discovery tool that helps traders and investors filter the market based on technical patterns, fundamentals, trends, volatility, and AI-driven signals. Users can scan thousands of stocks and ETFs using customizable filters such as industry, market capitalization, technical indicators, price patterns, and performance metrics, making it possible to identify trade ideas, trending stocks, and breakout candidates more efficiently than manual screening. For investors comparing funds like FAI and VGT, the screener offers a data-driven way to surface relative strength and momentum. Explore the AI Screener to refine your own market analysis.
Tickeron AI Verdict
Based on observable structural factors, Tickeron's AI would likely favor VGT over FAI at present. VGT's 0.09% expense ratio versus FAI's 0.65% represents a substantial, recurring cost advantage, while its roughly 320 holdings provide materially broader diversification than FAI's concentrated, non-diversified portfolio of around 50 to 60 names. VGT also benefits from deeper liquidity, a much longer operating history, and a lower level of single-stock and single-theme concentration risk. Although FAI offers more direct and potentially higher-beta exposure to the AI revenue theme, its higher fee and narrower base make it comparatively less efficient as a core technology holding. On balance, VGT's combination of cost efficiency, breadth, and structural resilience gives it the stronger probabilistic profile in the current environment.
Disclaimer
The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.
To compare these two companies we present long-term analysis, their fundamental ratings and make comparative short-term technical analysis which are presented below. The conclusion is FAI is a Hold and VGT is a Hold.
Momentum Indicator for FAI turns negative, indicating new downward trend
FAI saw its Momentum Indicator move below the 0 level on October 29, 2026. This is an indication that the stock could be shifting in to a new downward move. Traders may want to consider selling the stock or exploring put options. Tickeron's A.I.dvisor looked at 30 similar instances where the indicator turned negative. In 28 of the 30 cases, the stock moved further down in the following days. The odds of a decline are at 90%.
Technical Analysis (Indicators)
Bearish Trend Analysis
The Moving Average Convergence Divergence Histogram (MACD) for FAI turned negative on October 13, 2026. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 18 similar instances when the indicator turned negative. In 15 of the 18 cases the stock turned lower in the days that followed. This puts the odds of success at 83%.
FAI moved below its 50-day moving average on October 29, 2026 date and that indicates a change from an upward trend to a downward trend.
The 10-day moving average for FAI crossed bearishly below the 50-day moving average on October 23, 2026. This indicates that the trend has shifted lower and could be considered a sell signal. In 4 of 5 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are 80%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where FAI declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 81%.
The Aroon Indicator for FAI entered a downward trend on November 10, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Bullish Trend Analysis
The RSI Indicator points to a transition from a downward trend to an upward trend -- in cases where FAI's RSI Indicator exited the oversold zone, 8 of 9 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are 89%.
The Stochastic Oscillator shows that the ticker has stayed in the oversold zone for 6 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an upward trend is expected.
Following a +6.45% 3-day Advance, the price is estimated to grow further. Considering data from situations where FAI advanced for three days, in 130 of 148 cases, the price rose further within the following month. The odds of a continued upward trend are 88%.
FAI may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
VGT's RSI Indicator ascending out of oversold territory
The RSI Indicator for VGT moved out of oversold territory on November 09, 2026. This could be a sign that the stock is shifting from a downward trend to an upward trend. Traders may want to buy the stock or call options. The A.I.dvisor looked at 24 similar instances when the indicator left oversold territory. In 24 of the 24 cases the stock moved higher. This puts the odds of a move higher at 90%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Stochastic Oscillator shows that the ticker has stayed in the oversold zone for 5 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an upward trend is expected.
Following a +4.60% 3-day Advance, the price is estimated to grow further. Considering data from situations where VGT advanced for three days, in 335 of 385 cases, the price rose further within the following month. The odds of a continued upward trend are 87%.
VGT may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on October 29, 2026. You may want to consider selling the stock, shorting the stock, or exploring put options on VGT as a result. In 77 of 88 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are 88%.
The Moving Average Convergence Divergence Histogram (MACD) for VGT turned negative on October 12, 2026. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 53 similar instances when the indicator turned negative. In 41 of the 53 cases the stock turned lower in the days that followed. This puts the odds of success at 77%.
VGT moved below its 50-day moving average on October 29, 2026 date and that indicates a change from an upward trend to a downward trend.
The 10-day moving average for VGT crossed bearishly below the 50-day moving average on October 23, 2026. This indicates that the trend has shifted lower and could be considered a sell signal. In 13 of 15 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are 87%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where VGT declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 83%.
The Aroon Indicator for VGT entered a downward trend on November 10, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
| FAI | VGT | |
|---|---|---|
| RSI ODDS (%) | 2 days ago 89% | 2 days ago 90% |
| Stochastic ODDS (%) | 2 days ago 90% | 2 days ago 90% |
| Momentum ODDS (%) | 2 days ago 90% | 2 days ago 88% |
| MACD ODDS (%) | 2 days ago 83% | 2 days ago 77% |
| TrendWeek ODDS (%) | 2 days ago 82% | 2 days ago 82% |
| TrendMonth ODDS (%) | 2 days ago 84% | 2 days ago 87% |
| Advances ODDS (%) | 3 days ago 88% | 3 days ago 87% |
| Declines ODDS (%) | 7 days ago 81% | 10 days ago 83% |
| BollingerBands ODDS (%) | 2 days ago 85% | 2 days ago 90% |
| Aroon ODDS (%) | 2 days ago 76% | 2 days ago 90% |
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FAI and
Correlation & Price change
A.I.dvisor indicates that over the last year, FAI has been loosely correlated with ORCL. These tickers have moved in lockstep 66% of the time. This A.I.-generated data suggests there is some statistical probability that if FAI jumps, then ORCL could also see price increases.
| Ticker / NAME | Correlation To FAI | 1D Price Change % | ||
|---|---|---|---|---|
| FAI | 100% | -0.64% | ||
| ORCL - FAI | 66% Loosely correlated | -1.51% | ||
| ANET - FAI | 64% Loosely correlated | -0.62% | ||
| VRT - FAI | 58% Loosely correlated | -3.12% | ||
| AI - FAI | 47% Loosely correlated | -1.33% | ||
| GOOGL - FAI | 46% Loosely correlated | -0.27% | ||
More | ||||
| 1 Day | |||
|---|---|---|---|
| ETFs / NAME | Price $ | Chg $ | Chg % |
| EIPX | 32.75 | 0.14 | +0.43% |
| FT Energy Income Partners Strategy ETF (EIPX) | |||
| GLQ | 7.53 | 0.03 | +0.40% |
| Clough Global Equity Fund | |||
| PSCX | 33.48 | -0.03 | -0.10% |
| Pacer Swan SOS Conservative (January) ETF (PSCX) | |||
| RSPT | 59.53 | -0.14 | -0.23% |
| Invesco S&P 500 Equal Weight Technology ETF (RSPT) | |||
| XPP | 19.34 | -0.26 | -1.35% |
| ProShares Ultra FTSE China 50 (XPP) | |||