As the Magnificent Seven tech stocks falter, investment professionals are turning to emerging-market ETFs tied to the artificial intelligence boom. With the Bloomberg Magnificent 7 Total Return Index down 12.9% year-to-date through March 31, pros see similar return potential in companies producing semiconductors, hardware and commodities for AI data centers in markets like South Korea, Taiwan and Peru.

These emerging markets play crucial roles in the global AI supply chain, offering U.S. investors diversification beyond domestic tech giants. Aniket Ullal of CFRA Research notes these ETFs provide exposure to the AI supply chain while reducing dependence on U.S. growth stocks. However, investing in emerging markets carries risks including higher volatility, geopolitical tensions and currency fluctuations that can trigger sharp price swings during supply-chain disruptions or commodity price changes.

Investment professionals recommend retail investors access these opportunities through ETFs rather than individual stocks. ETFs offer diversification across multiple companies, lower transaction costs and tax benefits while mitigating risks from geopolitics and market volatility. As the AI revolution expands globally, emerging-market ETFs may provide the next significant growth opportunity for investors seeking alternatives to the Magnificent Seven.