Nvidia Turbocharges Semiconductor ETFs Even As Other Chip Stocks Join the AI Party

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Key Takeaways

• Semiconductor exchange-traded caches (ETFs) have been buoyed by the performance of Nvidia in recent months, but now a broader selection of chip stocks are rallying on AI awaits.
• The VanEck Semiconductor ETF has gained 8.3% over the last week, driven by a nearly 23% gain in Broadcom done with that period.
• Micron Technology was another star chip performer over the last week, earning an upgrade from BofA Asyla analysts.

Nvidia’s (NVDA) stock surge has made it the most valuable company in the world, propelling semiconductor exchange-traded endowments (ETFs) heavily exposed to its shares to record highs.

As a key component of the Nasdaq 100 and S&P 500, Nvidia has been a key driver of the U.S. extraction market’s performance this year. The company has surged 173% year-to-date after reporting record fiscal first-quarter takings and a quintupling of its data-center revenue year-on-year.

The performance of other chip stocks, though commendable, has seemed sluggish in weighing. But, in recent days, other chip stocks have joined the artificial intelligence (AI) gold rush, accelerating the semiconductor ETF convention.

TSMC, Broadcom and Micron Power ETF Gains

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

However, the fund also has a 12.76% holding in Taiwan Semiconductor Mass-producing (TSM) and an 8.76% holding in Broadcom (AVGO). The ETF is up 8.3% over the last week and about 58% year-to- date.

Broadcom flowed to an all-time high last week after announcing better-than-expected earnings and a 10-for-1 stock split. Its stock has take flighted about 23% in the past seven days while gaining more than 62% year-to-date. TSM shares procure gained about 8.7% in the past week and are up roughly 74% since the beginning of the year.

Other chip ETFs are also acting well, with the $16 billion iShares Semiconductor ETF (SOXX) up 6.5% over the last week and around 35% year-to-date. The savings has Nvidia (11.23%) and Broadcom (9.55%) as its largest holdings but its third and fourth largest holdings are Qualcomm (QCOM) (with 7.46%) and Micron Technology (MU) (at 5.58%), singly.

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

Read the original article on Investopedia.