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3 Tech Funds to Buy as Wall Street Rally Resumes on AI Enthusiasm
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The Wall Street rally has resumed with Donald Trump beginning his new presidential term. The rebound follows a shaky start to 2025, with major stock indexes resuming their upward trajectory. On Wednesday, the S&P 500 reached an intraday high before closing just below its all-time closing record high.
This renewed rally is being fueled by growing enthusiasm surrounding artificial intelligence (AI). Over the past few years, tech stocks have driven much of the broader market's rally, and their impressive performance shows no sign of slowing down.
Given the positive sentiment and the optimism surrounding AI, it would be ideal to invest in tech funds like DWS Science and Technology A (KTCAX - Free Report) , Janus Henderson Global Technology and Innovation Fund (JNGTX - Free Report) and T. Rowe Price Science & Tech (PRSCX - Free Report) that are set to excel in 2025.
S&P 500 Rallies on Trump’s AI Boost
The S&P 500 set an intraday record of 6,100.81 on Wednesday, before ending the day at 6,086.37— just shy of its all-time closing record. The Wall Street rally gained fresh momentum this week, driven by optimism surrounding AI and Trump’s second term.
On Wednesday, Trump announced a $500 million investment in AI infrastructure. The initiative, named Stargate, will be developed in partnership with Oracle Corporation (ORCL), SoftBank and OpenAI. Following the announcement, tech stocks surged.
AI enthusiasm has been a major factor propelling the stock market since 2024. The S&P 500 posted a 23.3% gain in 2024, following a 24.2% jump in 2023. Over the past two years, the index has soared 53%, marking its best performance since the 66% surge seen in 1997–1998.
Industry experts agree that AI holds tremendous untapped potential. Smart device innovation plays a key role in AI's advancement, requiring robust computing power and sophisticated learning capabilities for tasks like facial recognition, image analysis and video processing. These functions demand high levels of speed, memory, energy efficiency, and advanced graphics processors, all of which significantly benefit the semiconductor industry.
According to statista.com, the global AI market is projected to expand from $184.1 billion in 2024 to $243.7 billion this year, underscoring the rapid growth of this transformative technology.
3 Best Choices
We've chosen three funds from the tech sector that are a must-buy because of their exposure to AI. These funds have given impressive 3-year and 5-year annualized returns, boast a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy), offer a minimum initial investment within $5,000 and carry a low expense ratio.
Also, these funds boast an expense ratio of less than 1% and have a minimum initial investment of $5,000.
The question here is: why should investors consider mutual funds? Reduced transaction costs and diversification of portfolios without the several commission charges that are associated with stock purchases are the primary reasons why one should be parking their money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
DWS Science and Technology A fund seeks growth of capital. Under normal circumstances, KTCAX invests at least 80% of net assets in common stocks of U.S. companies in the technology sector. As of the last filing, KTCAX held significant AI stocks like Apple (AAPL - Free Report) , Meta Platforms (META - Free Report) , Microsoft (MSFT - Free Report) , NVIDIA (NVDA - Free Report) and Alphabet, Inc. (GOOGL - Free Report) .
DWS Science and Technology A fund has a track of positive total returns for over 10 years. Specifically, KTCAX’s returns over the three and five-year benchmarks are 11.9% and 20.3%, respectively. KTCAX has returned 40.8% in the past one year. DWS Science and Technology A fund has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.87%, which is lower than its category average of 1.03%
To see how this fund performed compared to its category and other #1 or 2 Ranked Mutual Funds, please click here.
Janus Henderson Global Technology and Innovation Fund aims for long-term growth of capital and specializes in technology. JNGTX invests the majority of its net assets in securities of companies that the portfolio manager believes will benefit significantly from advances or improvements in technology. As of the last filing, JNGTX held significant AI stocks like NVIDIA, Apple, Meta Platforms, Microsoft, and Taiwan Semiconductor Manufacturing Company Limited (TSM).
Janus Henderson Global Technology and Innovation Fund has a track of positive total returns for over 10 years. Specifically, JNGTX’s returns over the three and five-year benchmarks are 8.6% and 17.9%, respectively. JNGTX has a Zacks Mutual Fund Rank #2. Its annual expense ratio is 0.78%, which is lower than the category average of 1%.
To see how this fund performed compared to its category and other #1 or 2 Ranked Mutual Funds, please click here.
T. Rowe Price Science & Tech fund seeks to invest in long-term capital growth by investing at least 80% of net assets in common stocks of companies expected by T. Rowe Price to benefit from the development, advancement, and use of science and technology. While most of PRSCX’s assets are invested in U.S. common stocks, other securities may also be purchased, including foreign stocks, futures, and options, in keeping with the fund’s objectives. As of the last filing, PRSCX held significant AI stocks like Apple, Meta Platforms, Microsoft, NVIDIA and Advanced Micro Devices, Inc. (AMD - Free Report) .
T. Rowe Price Science & Tech has a track of positive total returns for over 10 years. Specifically, PRSCX returns over the three and five-year benchmarks are 11.8% and 16.5%, respectively. PRSCX has returned 40.3% in the past one year. The annual expense ratio of 0.79% is lower than the category average of 1.05%. PRSCX has a Zacks Mutual Fund Rank #2.
To see how this fund performed compared to its category, and other #1 or 2 Ranked Mutual Funds, please click here.
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3 Tech Funds to Buy as Wall Street Rally Resumes on AI Enthusiasm
The Wall Street rally has resumed with Donald Trump beginning his new presidential term. The rebound follows a shaky start to 2025, with major stock indexes resuming their upward trajectory. On Wednesday, the S&P 500 reached an intraday high before closing just below its all-time closing record high.
This renewed rally is being fueled by growing enthusiasm surrounding artificial intelligence (AI). Over the past few years, tech stocks have driven much of the broader market's rally, and their impressive performance shows no sign of slowing down.
Given the positive sentiment and the optimism surrounding AI, it would be ideal to invest in tech funds like DWS Science and Technology A (KTCAX - Free Report) , Janus Henderson Global Technology and Innovation Fund (JNGTX - Free Report) and T. Rowe Price Science & Tech (PRSCX - Free Report) that are set to excel in 2025.
S&P 500 Rallies on Trump’s AI Boost
The S&P 500 set an intraday record of 6,100.81 on Wednesday, before ending the day at 6,086.37— just shy of its all-time closing record. The Wall Street rally gained fresh momentum this week, driven by optimism surrounding AI and Trump’s second term.
On Wednesday, Trump announced a $500 million investment in AI infrastructure. The initiative, named Stargate, will be developed in partnership with Oracle Corporation (ORCL), SoftBank and OpenAI. Following the announcement, tech stocks surged.
AI enthusiasm has been a major factor propelling the stock market since 2024. The S&P 500 posted a 23.3% gain in 2024, following a 24.2% jump in 2023. Over the past two years, the index has soared 53%, marking its best performance since the 66% surge seen in 1997–1998.
Industry experts agree that AI holds tremendous untapped potential. Smart device innovation plays a key role in AI's advancement, requiring robust computing power and sophisticated learning capabilities for tasks like facial recognition, image analysis and video processing. These functions demand high levels of speed, memory, energy efficiency, and advanced graphics processors, all of which significantly benefit the semiconductor industry.
According to statista.com, the global AI market is projected to expand from $184.1 billion in 2024 to $243.7 billion this year, underscoring the rapid growth of this transformative technology.
3 Best Choices
We've chosen three funds from the tech sector that are a must-buy because of their exposure to AI. These funds have given impressive 3-year and 5-year annualized returns, boast a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy), offer a minimum initial investment within $5,000 and carry a low expense ratio.
Also, these funds boast an expense ratio of less than 1% and have a minimum initial investment of $5,000.
The question here is: why should investors consider mutual funds? Reduced transaction costs and diversification of portfolios without the several commission charges that are associated with stock purchases are the primary reasons why one should be parking their money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
DWS Science and Technology A fund seeks growth of capital. Under normal circumstances, KTCAX invests at least 80% of net assets in common stocks of U.S. companies in the technology sector. As of the last filing, KTCAX held significant AI stocks like Apple (AAPL - Free Report) , Meta Platforms (META - Free Report) , Microsoft (MSFT - Free Report) , NVIDIA (NVDA - Free Report) and Alphabet, Inc. (GOOGL - Free Report) .
DWS Science and Technology A fund has a track of positive total returns for over 10 years. Specifically, KTCAX’s returns over the three and five-year benchmarks are 11.9% and 20.3%, respectively. KTCAX has returned 40.8% in the past one year. DWS Science and Technology A fund has a Zacks Mutual Fund Rank #1 and an annual expense ratio of 0.87%, which is lower than its category average of 1.03%
To see how this fund performed compared to its category and other #1 or 2 Ranked Mutual Funds, please click here.
Janus Henderson Global Technology and Innovation Fund aims for long-term growth of capital and specializes in technology. JNGTX invests the majority of its net assets in securities of companies that the portfolio manager believes will benefit significantly from advances or improvements in technology. As of the last filing, JNGTX held significant AI stocks like NVIDIA, Apple, Meta Platforms, Microsoft, and Taiwan Semiconductor Manufacturing Company Limited (TSM).
Janus Henderson Global Technology and Innovation Fund has a track of positive total returns for over 10 years. Specifically, JNGTX’s returns over the three and five-year benchmarks are 8.6% and 17.9%, respectively. JNGTX has a Zacks Mutual Fund Rank #2. Its annual expense ratio is 0.78%, which is lower than the category average of 1%.
To see how this fund performed compared to its category and other #1 or 2 Ranked Mutual Funds, please click here.
T. Rowe Price Science & Tech fund seeks to invest in long-term capital growth by investing at least 80% of net assets in common stocks of companies expected by T. Rowe Price to benefit from the development, advancement, and use of science and technology. While most of PRSCX’s assets are invested in U.S. common stocks, other securities may also be purchased, including foreign stocks, futures, and options, in keeping with the fund’s objectives. As of the last filing, PRSCX held significant AI stocks like Apple, Meta Platforms, Microsoft, NVIDIA and Advanced Micro Devices, Inc. (AMD - Free Report) .
T. Rowe Price Science & Tech has a track of positive total returns for over 10 years. Specifically, PRSCX returns over the three and five-year benchmarks are 11.8% and 16.5%, respectively. PRSCX has returned 40.3% in the past one year. The annual expense ratio of 0.79% is lower than the category average of 1.05%. PRSCX has a Zacks Mutual Fund Rank #2.
To see how this fund performed compared to its category, and other #1 or 2 Ranked Mutual Funds, please click here.
Want key mutual fund info delivered straight to your inbox?
Zacks' free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>