JPMorgan's AI Call Shifts ETF Focus Beyond Nvidia And Microsoft To Software Underdogs

For more than a year, the AI investment boom has largely revolved around the same handful of mega-cap names — led by Nvidia Corp (NASDAQ:NVDA) and Microsoft Corp (NASDAQ:MSFT) — while semiconductor and infrastructure ETFs absorbed billions in investor flows.

But a new note from JPMorgan commands a shift in attention toward a different corner of the market. Smaller enterprise software companies embedding AI directly into sales, marketing, design and workflow automation have caught the investment firm’s eye.

The bank recently highlighted GTM parent ZoomInfo Technologies Inc. (NASDAQ:GTM), HubSpot, Inc. (NYSE:HUBS) and Figma, Inc. (NYSE:FIG) as emerging AI application-layer winners, assigning upside targets of more than 214%, 115% and 91%, respectively.

That thesis is quietly creating a new ETF angle.

AI ETF Flows Have Been Dominated By Infrastructure

Most ETF investors chasing AI exposure over the past 18 months have concentrated heavily in semiconductor and hardware-linked funds.

The VanEck Semiconductor ETF (NASDAQ:SMH) and the iShares Semiconductor ETF (NASDAQ:SOXX) together attracted billions in cumulative inflows during the peak of the AI infrastructure rally as investors crowded into Nvidia-driven momentum trades.

Meanwhile, broader software ETFs have remained comparatively overlooked despite growing AI integration across enterprise platforms.

Funds like the iShares Expanded Tech-Software Sector ETF (BATS:IGV), First Trust Cloud Computing ETF (NASDAQ:SKYY), Global X Cloud Computing ETF (NASDAQ:CLOU) and Global X Artificial Intelligence & Technology ETF (NASDAQ:AIQ) hold exposure to AI software and workflow automation companies, though most of those positions remain far smaller than the mega-cap AI leaders dominating benchmark indexes.

That imbalance may now be drawing attention as investors look beyond chips and data centers toward companies actually monetizing AI adoption inside enterprise operations.

Comparing the inflows, so far this year, only IGV has managed to be at par with (and then some) SMH and SOXX, whereas SKYY, CLOU and AIQ are far behind in flow movements, with SKYY and CLOU standing with net redemptions.

The ‘Application Layer’ Trade Is Emerging

JPMorgan's bullish calls reflect a broader Wall Street shift toward what many investors increasingly describe as the AI application layer.

Rather than building chips or cloud infrastructure, companies like ZoomInfo and HubSpot are integrating AI copilots, automated customer engagement tools and workflow intelligence directly into existing software ecosystems.

Figma, meanwhile, is emerging as a key AI-assisted design and product collaboration platform as generative AI increasingly reshapes software development workflows.

The shift matters because recurring software revenue may ultimately become one of the clearest long-term monetization channels for generative AI.

That narrative also creates a potential second-wave opportunity for ETF investors whose portfolios remain heavily concentrated in the same mega-cap AI infrastructure names.

Smaller AI Software Names Could Reshape ETF Positioning

The story is especially notable because none of JPMorgan's highlighted names currently sit at the center of mainstream AI ETF allocations, except for CLOU, which holds about 3.2% in HubSpot, which is not that significant in a fund with $245.96 million in AUM.

Unlike Nvidia or Microsoft, these companies occupy relatively modest weights inside diversified software and cloud-computing ETFs.

That creates room for meaningful positioning changes if institutional investors begin rotating toward AI-enabled enterprise software.

It also raises questions about whether the next phase of ETF inflows could favor application-focused software exposure rather than the infrastructure-heavy AI trades that dominated 2024 and early 2025.

For ETF issuers, the trend could eventually support new product launches centered specifically on AI software monetization — an area still far less crowded than semiconductor-focused AI funds.

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