AI Boom Spreads Beyond Chips to Cloud, Security, Software ETFs

Artificial intelligence has fueled one of the strongest stock market rallies in recent years, with semiconductor companies leading much of the market's gains in 2026. However, the article argues that while chipmakers remain central to the AI ecosystem, the next phase of growth is likely to come from companies that help businesses deploy and secure AI applications rather than build the underlying hardware.

Three ETFs are highlighted as positioned to capture this shift. The First Trust Cloud Computing ETF (SKYY) invests in cloud infrastructure and cloud platform companies; it is up 10.24% year to date and has produced a 73.21% total return over the past three years. The First Trust Nasdaq Cybersecurity ETF (CIBR) provides exposure to leading cybersecurity firms including Palo Alto Networks, Cisco Systems, Broadcom, and Zscaler; it has returned 21.93% year to date and 100.44% over three years. The iShares Expanded Tech-Software Sector ETF (IGV) focuses on enterprise software companies including Microsoft, Oracle, Salesforce, and Palantir; it is down 17.42% year to date but has still delivered 279.20% over three years.

The article explains that the first phase of the AI boom was driven by companies developing hardware for model training, but businesses are now increasingly investing in cloud infrastructure to deploy AI applications, cybersecurity solutions to protect AI systems, and software platforms to automate tasks and improve productivity. Most organizations lack their own infrastructure to run AI applications, making cloud platforms the primary way they access computing power. As AI deployment spreads, AI is expected to increase both the volume and sophistication of cyber threats while expanding the sensitive data organizations must protect. For long-term value, many businesses expect to gain the most from software that improves productivity by integrating AI into existing enterprise platforms rather than building AI models themselves.

The article concludes that while all three ETFs could benefit if enterprise AI spending continues to broaden beyond semiconductor companies during the second half of 2026, CIBR appears particularly well positioned, supported by its strong year-to-date performance and continued enterprise demand for cybersecurity solutions.

The article reflects a shift in how investors are thinking about artificial intelligence's business impact. While semiconductor companies drove most of 2026's stock market gains by supplying the hardware for AI model training, the piece argues that the next profitable phase will come from companies helping enterprises actually use AI in practice. This is a natural progression: raw computing power alone creates little business value until organizations can deploy it efficiently and securely.

The three ETFs represent three necessary layers of this deployment infrastructure. Cloud platforms solve the access problem—most businesses lack their own AI-capable infrastructure, so they must rent computing capacity from cloud providers. Cybersecurity addresses the risk problem—more AI systems and more data handling create more attack surface. Enterprise software captures the productivity value—the reason companies buy AI in the first place is to automate tasks and improve workflows. The article notes that CIBR has shown the strongest momentum (21.93% year to date) and appears "particularly well positioned," though it hedges by stating that all three could benefit if enterprise spending broadly accelerates in the second half of 2026.

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