1 Tech ETF Set to Outperform as Agentic and Physical AI Transform 2025

Wall Street analysts expect solid market gains in 2025. The S&P 500 consensus outlook projects a 9% rise in the benchmark index, offering investors a potential total return of 10.2% including dividends.

However, artificial intelligence (AI) investments could drive even stronger returns this year. Based on Wall Street consensus estimates, the Invesco QQQ Trust (NASDAQ: QQQ), a technology-focused exchange-traded fund (ETF), should deliver a robust 15.5% gain, with total returns approaching 16% after accounting for dividends and its modest 0.20% expense ratio.

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Here's why three major AI catalysts could drive this outperformance versus the S&P 500 in 2025.

Catalyst No. 1: The great data center hyperbuild

Big tech isn't playing around when it comes to ramping up its computing power. Microsoft alone plans to spend $80 billion on AI-enabled data centers in fiscal 2025, with over half of this investment targeted for the United States. This unprecedented capital deployment highlights the scale of infrastructure needed to power next-generation AI systems and the ongoing AI arms race occurring both within the U.S. tech landscape and between the U.S. and China more broadly.

Where is this trend heading? Industry forecasts project AI-ready data center capacity will grow at a blistering 33% annual rate through 2030, creating sustained demand for hardware, software, and services from the Invesco QQQ Trust's top technology holdings, such as Nvidia (NASDAQ: NVDA) and Microsoft.

The bottom line is that the AI data center hyperbuild will remain a key theme for several more years, which should put wind in the sails of many of the ETF's core holdings in 2025. For this reason alone, the Invesco QQQ ought to continue to outperform the broader market, represented by the S&P 500, in 2025.

QQQ data by YCharts

Catalyst No. 2: The rise of agentic AI

The next wave of AI isn't just about raw computing power. Nvidia CEO Jensen Huang predicts 2025 will mark a watershed moment for AI in business operations, with new AI agents capable of automating up to 50% of tasks across roles from customer service to supply chain management. This shift from experimental technology to widespread deployment could accelerate enterprise spending on AI solutions.

The race to capture this market is already heating up. Salesforce has launched its Agentforce platform for business automation, while several other major tech firms are pouring resources into competing solutions. This rapid development cycle should drive significant revenue growth for the fund's enterprise software leaders throughout 2025 and beyond.

Catalyst No. 3: Physical AI takes center stage

Humanoid robots are no longer science fiction. Nvidia is launching Jetson Thor in early 2025, a new generation of compact computers designed for these advanced machines. The chipmaker aims to provide the computing backbone for robot manufacturers worldwide, opening up a new revenue stream beyond its core AI chip business.

Why does this matter for investors? The push into physical AI significantly expands the addressable market for many of the fund's top holdings. The robotics revolution creates multiple paths to revenue growth for the Invesco QQQ Trust's top technology leaders, from the chips powering these machines to the software controlling them.

Transforming tech, transforming returns

The Invesco QQQ Trust offers investors concentrated exposure to the companies leading these three transformative trends. While the technology sector can experience periods of volatility, the convergence of massive data center investments, agentic AI deployment, and robotics advancement creates powerful tailwinds for 2025.

The tech giants in this fund are pouring billions into AI development to maintain their market leadership. With consensus forecasts pointing to market-beating returns from these powerful catalysts, the Invesco QQQ Trust offers investors a simple and cost-effective way to capture the emerging value from this megatrend without picking individual stocks.

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George Budwell has positions in Microsoft and Nvidia. The Motley Fool has positions in and recommends Microsoft, Nvidia, and Salesforce. The Motley Fool 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.