Artificial intelligence (AI) is currently dominating the technology sector, with big tech giants like NVIDIA, Microsoft, Amazon, and others contributing to record levels in the S&P 500 and Nasdaq Composite. As Nvidia’s stock continues to rise rapidly, some investors may be looking for alternative options in the AI chip space. The VanEck Semiconductor ETF (NASDAQ: SMH) could be a great opportunity for long-term investors interested in semiconductor businesses beyond Nvidia.
The VanEck Semiconductor ETF holds shares of 25 semiconductor companies, with Nvidia being the largest holding. Other notable holdings include Taiwan Semiconductors, Broadcom, ASML Holdings, Qualcomm, Intel, and Advanced Micro Devices. This ETF provides exposure to various sectors of the AI chip market, from GPU space to chip applications in IoT, smart home appliances, mobile devices, and network infrastructure. Qualcomm, in particular, presents an interesting opportunity for investors due to its ongoing turnaround efforts, with potential for growth if the company continues executing on its initiatives.
The fund has performed well over the years, with average annual total returns exceeding the long-term average return of the S&P 500. The five- and ten-year returns are particularly impressive, outperforming the S&P 500’s returns. While the semiconductor space is cyclical and subject to demand fluctuations, the VanEck Semiconductor ETF offers diversification and exposure to chip companies and AI at a reasonable price.
Investors looking for broad exposure to the chip space and AI should consider the VanEck Semiconductor ETF as a good option outside of the most obvious plays. With a reasonable expense ratio of 0.35%, this ETF provides investors with diversified exposure to the semiconductor industry. Overall, the VanEck Semiconductor ETF is a compelling option for investors interested in the AI chip space.
Before buying shares in the VanEck Semiconductor ETF, investors should consider the long-term performance and diversification benefits it offers. While it may not have made it to the list of the 10 best stocks identified by the Stock Advisor analyst team, the ETF still presents a solid opportunity for investors looking to capitalize on the growth potential of the semiconductor industry and AI sector.
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https://finance.yahoo.com/news/missed-nvidia-heres-1-spectacular-111500397.html
