Key Points
The VanEck Semiconductor ETF (NASDAQ: SMH) is emerging as a top investment choice amid ongoing growth in artificial intelligence (AI) and semiconductor markets. The ETF, which tracks the MVIS U.S. Listed Semiconductor 25 Index, has holdings that include Nvidia, Taiwan Semiconductor Manufacturing, and Advanced Micro Devices, with Nvidia alone accounting for 19% of its assets.
As of now, SMH is trading at a price-to-earnings ratio of 41. Key growth forecasts for its top holdings suggest Nvidia will see a 91% revenue increase this quarter, while TSMC aims for 47% growth. The AI sector is projected to fuel additional demand for chips, particularly after Meta’s recent launch of its AI personal assistant.
The SMH ETF has performed notably well over the past decade, outperforming the market and other semiconductor ETFs, indicating strong potential for continued upside in a rapidly evolving tech landscape.
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