Nvidia, Meta, Apple, and Microsoft Could Help This BlackRock ETF Turn $200,000 Into $1 Million by 2040

BlackRock is the largest asset manager in the world. It oversees more than $11.6 trillion in client money, with around $3.5 trillion of that invested in exchange-traded funds (ETFs) operated by its iShares subsidiary.

An ETF can hold hundreds or even thousands of individual stocks, so investors can build a complete portfolio by owning just a few of them. iShares offers more than 1,400 to choose from, helping investors track popular indexes like the S&P 500, or even gain exposure to emerging industries like artificial intelligence (AI).

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

The iShares Expanded Tech Sector ETF (NYSEMKT:IGM) holds many of the world's leading AI stocks, and I'll explain why it's capable of turning an investment of $200,000 into $1 million by 2040. But don't worry -- investors with any starting balance can earn a fivefold return if this scenario plays out.

Image source: Getty Images.

Hundreds of tech stocks packed into one ETF

The iShares ETF aims to invest in a broad variety of companies spread across the hardware and software segments of the technology sector. It just so happens that AI is a core focus for many of those companies right now, so this ETF has become a good proxy for the emerging AI industry.

The fund currently holds 289 stocks, but it's relatively top-heavy because its four largest holdings alone represent 33.2% of the value of its entire portfolio. However, they are four of the biggest names in the AI space right now:

Data source: iShares. Portfolio weightings are accurate as of Feb. 12, 2025, and are subject to change.

Meta Platforms is the parent company of social networks like Facebook and Instagram. It uses AI to power the content recommendation engines on those platforms, and it even uses AI to help businesses craft engaging ads. However, Meta has also developed the world's most popular family of open-source large language models (LLMs), called Llama, and CEO Mark Zuckerberg thinks 2025 could be the year they outperform even the best closed-source models from start-ups like OpenAI.

Apple, on the other hand, could eventually become the biggest distributor of AI to consumers thanks to its new Apple Intelligence software, which now comes standard in every new iPhone, iPad, and Mac computer. It introduces several new AI-powered features and transforms many old ones, including the Siri voice assistant which now borrows its knowledge and capabilities from OpenAI's ChatGPT.

Then there is Microsoft, which also partnered with OpenAI to develop its own AI assistant called Copilot. But Microsoft is also a leader in the cloud computing industry through its Azure platform, which has become a popular destination for developers seeking the computing power and ready-made LLMs needed to build their own AI applications.

Nvidia's graphics processing units (GPUs) for the data center are the best in the industry for developing AI, and they have powered every innovation I mentioned above. The company recently launched its new Blackwell chips which are paving the way for the most advanced AI models to date. But that's not all, because Nvidia is also gearing up to lead other AI-related industries like autonomous driving and robotics.

Sitting just outside its top four positions, investors will find other prominent AI stocks in the iShares ETF like Alphabet, Broadcom, Oracle, Palantir Technologies, Advanced Micro Devices, and more.

Turning $200,000 into $1 million by 2040

The iShares ETF has delivered a compound annual return of 11% since it was established in 2001, comfortably outpacing the average annual return of 8.5% in the S&P 500 over the same period. However, the ETF has generated an accelerated annual return of 20.3% over the past decade, thanks to the growing adoption of technologies like enterprise software, cloud computing, and now, AI.

The below table shows how long it could take the ETF to turn an investment of $200,000 into $1 million based on a range of potential returns:

Calculations by author.

Maintaining an annual return of 20% or more over the long term is extremely difficult for any fund, because companies eventually reach the point of saturation in their addressable markets, which makes it harder to continue generating additional growth. However, even if the iShares ETF reverts back to its long-run average return of 11% per year, it can still turn $200,000 into $1 million by 2040.

With that said, AI could be one of the most valuable opportunities in history, so elevated returns certainly aren't out of the question over the next few years. PwC thinks AI will add $15.7 trillion to the global economy by 2030, and a lot of that value will be facilitated by the companies in the iShares ETF.

But there is also the possibility that AI fails to live up to the hype, which could erode some of the gains in stocks like Nvidia and trigger a period of underperformance in the iShares ETF. That's a risk investors should keep in mind moving forward, and it's a good argument for owning the ETF as part of a diversified portfolio of other funds and individual stocks.

Should you invest $1,000 in iShares Trust - iShares Expanded Tech Sector ETF right now?

Before you buy stock in iShares Trust - iShares Expanded Tech Sector ETF, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and iShares Trust - iShares Expanded Tech Sector ETF wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $850,946!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.

Learn more »

*Stock Advisor returns as of February 7, 2025

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Apple, Meta Platforms, Microsoft, Nvidia, Oracle, and Palantir Technologies. The Motley Fool recommends Broadcom and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.