Semiconductor-focused ETFs are once again leading the market, shaking off geopolitical jitters and reclaiming momentum as investors double down on the artificial intelligence trade.
Over the past month, chip-linked funds, particularly those tied to Nvidia Corp (NASDAQ:NVDA), have dominated large-cap ETF performance charts, with Invesco PHLX Semiconductor ETF (NASDAQ:SOXQ), GraniteShares 2x Long NVDA Daily ETF (NASDAQ:NVDL), and Direxion Daily NVDA Bull 2X ETF (NASDAQ:NVDU) emerging as standout gainers, with gains of 20%, 15% and 14%, respectively.
On the other hand, Marvell Technology Inc (NASDAQ:MRVL), which has gained more than 46% in the past month, has also driven significant gains in ETFs exposed to it. The Direxion Daily MRVL Bull 2X Shares (NASDAQ:MRVU) have posted eye-popping returns of over 100% in the same period, proof that leverage and AI hype remain a potent (albeit risky) cocktail.
At the center of this rally sits the VanEck Semiconductor ETF (NASDAQ:SMH), widely viewed as the sector’s benchmark. The fund has surged 20% in the past month and 25% year to date, significantly outpacing the broader market, including the S&P 500 index, which has managed only modest gains of 5% in the past month and 3% YTD amid a choppy macro backdrop.
Its top holdings read like a who’s who of the AI supply chain, including Nvidia, Taiwan Semiconductor Manufacturing Company Ltd (NYSE:TSM), Broadcom Inc (NASDAQ:AVGO), Intel Corp (NASDAQ:INTC), and Lam Research Corp (NASDAQ:LRCX).
AI Spending Fuels Broad-Based Chip Rally
The resurgence in semiconductor ETFs is being driven by one dominant force: accelerating AI infrastructure spending. Hyperscalers continue to commit massive capital toward data center expansion, and semiconductors sit at the heart of that build-out. From advanced GPUs and memory chips to fabrication equipment and foundry services, demand is surging across the entire value chain.
This broad-based strength is clearly reflected in SMH’s holdings. Shares of Lam Research have climbed more than 40% year to date, supported by strong earnings growth and rising demand for wafer fabrication tools essential to next-generation chips. Meanwhile, Intel has staged a dramatic comeback, with its stock up roughly 70% this year as investors bet on a turnaround driven by foundry expansion and AI ambitions.
For now, momentum remains firmly on the side of the bulls. As long as AI-driven demand continues to outpace supply, semiconductor ETFs are likely to remain at the forefront of the market, proving once again that when it comes to investing trends, chips aren’t just down, they’re all-in.
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