Semiconductor ETF Surges 89% in 2023 as Chip Sector Targets $1 Trillion Revenue Milestone
Eddie Ghabour, CEO of Key Advisors Wealth Management, anticipates market corrections this summer after a rapid surge in tech stocks. He advises investors to prepare for choppy trading and look for buying opportunities.
This year, semiconductors and the physical infrastructure of artificial intelligence (AI) are dominating the exchange-traded fund (ETF) landscape. For instance, the iShares Semiconductor ETF has surged by 89% year to date, reflecting the intense interest and investment in AI.
What’s Driving the Semiconductor Boom
Semiconductors and AI are inextricably linked in a mutually reinforcing cycle. AI relies on increasingly sophisticated chips to function, while the advancements in AI are reshaping chip design and manufacturing processes. Essentially, AI is engineered to perform tasks that typically require human intelligence, and semiconductors are the essential devices that facilitate this capability.
Driven by AI and data-center demand, the chip industry is in a powerful upcycle. (Lyu Bin/VCG via Getty Images)
TAP INTO THE HUMANOID ROBOTICS BOOM WITH THIS ETF
Fueled by AI and data-center demand, the semiconductor industry is experiencing a robust upcycle. Major cloud providers are investing heavily in AI infrastructure, which is uplifting the entire semiconductor value chain. This surge in demand for central processors, graphics processors, power management, memory, and manufacturing equipment has led to semiconductor revenue reaching $298.5 billion in the first quarter of 2026, marking a remarkable 25% increase from the previous quarter.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| SOXX | ISHARES TRUST ISHARES SEMICONDUCTOR ETF | 571.45 | +31.68 | +5.87% |
A Closer Look at an ETF That’s Soaring
The iShares Semiconductor ETF is a passively managed fund that offers exposure to large-cap and mid-cap companies, primarily through U.S.-listed stocks. It tracks the NYSE Semiconductor Index and currently holds a concentrated basket of 30 stocks, including industry leaders like Micron Technology, Advanced Micro Devices, and Marvell Technology.
WHAT ARE ACTIVE ETFS AND HOW ARE THEY RESHAPING HOW AMERICANS INVEST?
With a reasonable expense ratio of 0.34%, or $34 per $10,000 invested annually, SOXX provides access to a focused group of sector-specific ETFs.
Predicted to Top the $1 Trillion Threshold by the End of 2026
According to IDC’s April forecast, the semiconductor market is expected to exceed the $1 trillion revenue threshold by the end of this year. However, investing in a semiconductor ETF may not be suitable for everyone.
Investors should remain cautious, as various factors could impact AI’s popularity, including hype fatigue, slower-than-expected adoption, or constraints on power and data-center buildouts. Like all technology, semiconductor stocks and ETFs can be volatile, and there are no guarantees of continued success.
HOW ETFS CAN BE EFFECTIVE BUILDING BLOCKS FOR RETIREES
As a passively managed ETF, the iShares Semiconductor ETF provides exposure to large-cap and mid-cap companies. (Brendan McDermid/Reuters)
Before making any investment decisions, it’s crucial to look beyond the current hype and thoroughly understand what you’re buying. If you decide to invest in a semiconductor ETF, ensure it fits within a well-diversified portfolio intended for long-term holding.
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Dana George has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Marvell Technology, Micron Technology, and iShares Trust – iShares Semiconductor ETF. The Motley Fool has a disclosure policy.
Eddie Ghabour, CEO of Key Advisors Wealth Management, anticipates market corrections this summer after a rapid surge in tech stocks. He advises investors to prepare for choppy trading and look for buying opportunities.
This year, semiconductors and the physical infrastructure of artificial intelligence (AI) are dominating the exchange-traded fund (ETF) landscape. For instance, the iShares Semiconductor ETF has surged by 89% year to date, reflecting the intense interest and investment in AI.
What’s Driving the Semiconductor Boom
Semiconductors and AI are inextricably linked in a mutually reinforcing cycle. AI relies on increasingly sophisticated chips to function, while the advancements in AI are reshaping chip design and manufacturing processes. Essentially, AI is engineered to perform tasks that typically require human intelligence, and semiconductors are the essential devices that facilitate this capability.
Driven by AI and data-center demand, the chip industry is in a powerful upcycle. (Lyu Bin/VCG via Getty Images)
TAP INTO THE HUMANOID ROBOTICS BOOM WITH THIS ETF
Fueled by AI and data-center demand, the semiconductor industry is experiencing a robust upcycle. Major cloud providers are investing heavily in AI infrastructure, which is uplifting the entire semiconductor value chain. This surge in demand for central processors, graphics processors, power management, memory, and manufacturing equipment has led to semiconductor revenue reaching $298.5 billion in the first quarter of 2026, marking a remarkable 25% increase from the previous quarter.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| SOXX | ISHARES TRUST ISHARES SEMICONDUCTOR ETF | 571.45 | +31.68 | +5.87% |
A Closer Look at an ETF That’s Soaring
The iShares Semiconductor ETF is a passively managed fund that offers exposure to large-cap and mid-cap companies, primarily through U.S.-listed stocks. It tracks the NYSE Semiconductor Index and currently holds a concentrated basket of 30 stocks, including industry leaders like Micron Technology, Advanced Micro Devices, and Marvell Technology.
WHAT ARE ACTIVE ETFS AND HOW ARE THEY RESHAPING HOW AMERICANS INVEST?
With a reasonable expense ratio of 0.34%, or $34 per $10,000 invested annually, SOXX provides access to a focused group of sector-specific ETFs.
Predicted to Top the $1 Trillion Threshold by the End of 2026
According to IDC’s April forecast, the semiconductor market is expected to exceed the $1 trillion revenue threshold by the end of this year. However, investing in a semiconductor ETF may not be suitable for everyone.
Investors should remain cautious, as various factors could impact AI’s popularity, including hype fatigue, slower-than-expected adoption, or constraints on power and data-center buildouts. Like all technology, semiconductor stocks and ETFs can be volatile, and there are no guarantees of continued success.
HOW ETFS CAN BE EFFECTIVE BUILDING BLOCKS FOR RETIREES
As a passively managed ETF, the iShares Semiconductor ETF provides exposure to large-cap and mid-cap companies. (Brendan McDermid/Reuters)
Before making any investment decisions, it’s crucial to look beyond the current hype and thoroughly understand what you’re buying. If you decide to invest in a semiconductor ETF, ensure it fits within a well-diversified portfolio intended for long-term holding.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
Dana George has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Marvell Technology, Micron Technology, and iShares Trust – iShares Semiconductor ETF. The Motley Fool has a disclosure policy.
