Nvidia Turbocharges Semiconductor ETFs Even other chip stocks join the AI ​​party

Key takeaways

  • Semiconductor exchange-traded funds (ETFs) have been buoyed by Nvidia's performance in recent months, but now a wider selection of chip stocks are riding on AI hopes.
  • The VanEck Semiconductor ETF has gained 8.3% over the past week, outperforming Broadcom's nearly 23% gain over the period.
  • Micron Technology was another star chip performer over the past week, earning an upgrade from analysts at BofA Securities.
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Nvidia's ( NVDA ) stock surge has made it the world's most valuable company, sending semiconductor exchange-traded funds (ETFs) holdings of its shares to record highs.

As a key component of the Nasdaq 100 and the S&P 500, Nvidia has been a key driver of US stock market performance this year. The company reported record fiscal first-quarter revenue and a 173% year-over-year increase in its data center revenue.

The performance of other chipsets, though commendable, looked sluggish in comparison. But, in recent days, other chip stocks have joined the artificial intelligence (AI) gold rush, fueling the semiconductor ETF rally.

Benefits of TSMC, Broadcom and Micron Power ETFs

The VanEck Semiconductor ETF ( SMH ), for example, has about $23.7 billion in assets under management (AUM) and counts Nvidia as its largest holding, at 24.6% of the portfolio.

However, the fund also has 12.76% holdings in Taiwan Semiconductor Manufacturing ( TSM ) and 8.76% in Broadcom ( AVGO ). The ETF is up 8.3% from last week and about 58% year-to-date.

Broadcom hit an all-time high last week after announcing better-than-expected earnings and a 1-for-1 stock split. Its stock has risen nearly 23% over the past seven days, while it's up more than 62% year-to-date. Shares of TSM have gained about 8.7% in the past week and are up about 74% since the start of the year.

Other chip ETFs are also doing well, with the $16 billion iShares Semiconductor ETF ( SOXX ) up 6.5 percent over the past week and nearly 35 percent year-to-date. The fund has the largest holdings in Nvidia (11.23%) and Broadcom (9.55%), but its third and fourth largest holdings are respectively Qualcomm ( QCOM ) (at 7.46%) and Micron Technology ( MU ) (at 5.58%). ) are

Bank of America raised its price target on Micron to $170 from $144 yesterday, calling it a “top U.S. memory company.” The company's shares have gained 13.6% in the past week and are up nearly 80% year-to-date. Qualcomm stock has returned 8.9% and 58.4%, respectively, during the same period.

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