This Unstoppable ETF Has Doubled the S&P 500 This Year. Is It a Buy Right Now?

The Vanguard Information Technology Index Fund (VGT) has returned 22% year-to-date through 2024, outpacing the S&P 500's 8% gain by nearly three times. The tech-focused ETF captures exposure to secular growth drivers including artificial intelligence, cloud computing, and digitalization.

AI capital spending is projected to hit $765 billion in 2024, according to forecasts cited by The Motley Fool, with expectations for that figure to more than double to $1.6 trillion by 2031. This seven-year capital expenditure cycle positions VGT's underlying holdings to benefit from enterprise and hyperscaler infrastructure buildouts.

The ETF's structure tracks the MSCI US Investable Market Information Technology 25/50 Index, providing concentrated exposure to mega-cap technology names that dominate AI chip production, cloud platforms, and software infrastructure. Year-to-date outperformance reflects investor appetite for names levered to AI infrastructure spend rather than broader market diversification.