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The semiconductor industry is crucial for the artificial intelligence (AI) sector, with companies like Nvidia, Advanced Micro Devices (AMD), and Broadcom leading in the supply of data center chips. Nvidia CEO Jensen Huang projects that AI infrastructure spending could reach $4 trillion by 2030, emphasizing the potential growth in this sector.
The iShares Semiconductor ETF (NASDAQ: SOXX), focused on companies supplying chips and computing hardware, includes major holdings like AMD (9.77%), Nvidia (8.57%), and Broadcom (8.17%). The ETF has shown impressive performance, with a compound annual return of 11.4% since 2001 and a notable 24.1% over the last decade, driven by high demand for AI technologies.
Since the AI boom in early 2023, these three stocks have averaged a return of 550%, significantly outperforming the S&P 500. If the iShares ETF continues its growth trajectory, an investment of $250,000 could potentially turn into $1 million in as little as 7 years, assuming a compound annual return of 24.1%.
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