Had You Bought This Magnificent Vanguard ETF at the Start of January, You’d Be Crushing the S&P 500 in 2026

Should investors still buy the Vanguard Information Technology ETF?

This Vanguard ETF has a stellar track record against the broader market. It has delivered a compound annual return of 14.9% since it was established in 2004, beating the S&P 500, which returned 10.9% per year over the same period. That 4 percentage-point difference might not sound like much at face value, but it would’ve had an incredible impact in dollar terms because of the magic of compounding.

Data source: Calculations by author.

From that perspective, buying the Vanguard ETF seems like a no-brainer for long-term investors. But there are some near-term risks worth considering, centered on the sustainability of the AI infrastructure spending boom. While most tech giants are moving full steam ahead with their planned capital expenditures, the rising cost of chips and components has forced some AI providers to implement passive price increases for their models and software products.

This is causing some angst among their customers. Uber Technologies, for example, recently burned through its entire 2026 AI budget in just four months by using Anthropic’s Claude Code. Uber’s chief operating officer said it’s becoming harder to justify that kind of spending.

Alphabet CEO Sundar Pichai said he’s fielding similar complaints from many of Google’s enterprise AI customers. A recent survey by UBS Group suggests 60% of businesses are now curbing some of their AI spending by using cheaper models that use less computing power, which could spell trouble for semiconductor demand in the near future.

Investors can smooth out this noise by adopting a time horizon of five years or more, because AI is likely here to stay despite any short-term teething problems. Plus, a number of other technologies are in the pipeline that could deliver spectacular long-term returns for the Vanguard ETF, such as robotics, autonomous vehicles, and quantum computing.

As a result, investors who don’t have much exposure to information technology stocks already might want to consider adding this ETF to their portfolio.

Should you buy stock in Vanguard Information Technology ETF right now?

Before you buy stock in Vanguard Information Technology 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 Vanguard Information Technology ETF wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $398,160!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,249,202!*

That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don’t miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul.

See the 10 stocks »

*Stock Advisor returns as of July 14, 2026.

Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Apple, Broadcom, Intel, Lam Research, Micron Technology, Microsoft, Nvidia, and Uber Technologies. The Motley Fool has a disclosure policy.

Had You Bought This Magnificent Vanguard ETF at the Start of January, You’d Be Crushing the S&P 500 in 2026 was originally published by The Motley Fool