Can Semiconductor ETFs Continue to Shine in 2024?
Semiconductor stocks surged this year, thanks to the AI Bonanza, as these companies provide picks and shovels for the AI gold rush. Semiconductor ETFs are also the best-performing ETFs of the last 10 years, as chips—the basic building blocks of computation—have become integral in everything from smartphones to cars, laptops, PCs, video games, and data centers.
Shares of Nvidia NVDA, which currently holds more than 85% of the market for generative-AI chips, are up more than 240% this year. However, the stock has taken a breather since topping $500 in August, while some others, like Advanced Micro Devices AMD and Broadcom AVGO, have risen lately.
Despite the eye-popping surge, Nvidia now trades at just 25 times forward earnings, the lowest level since the end of 2018, according to top semiconductor analyst Stacy Rasgon.
Earlier this month, AMD introduced its newest AI chips that could provide some competition to Nvidia’s H100. Microsoft MSFT and Meta META said they will use AMD’s MI300 chip. Intel INTC also announced it will launch its Gaudi3 AI chip next year.
The VanEck Vectors Semiconductor ETF SMH follows a market cap weighted index of 25 US-listed semiconductor companies. Nvidia and Taiwan Semiconductor TSM are its top holdings.
The iShares PHLX Semiconductor ETF SOXX is a modified market cap weighted ETF. It has 30 holdings with a cap of 8% on individual securities. Broadcom and AMD are its top holdings.
The SPDR S&P Semiconductor ETF XSD is an equal weighted ETF. The Invesco PHLX Semiconductor ETF SOXQ is now the cheapest product in the space.
To learn more about these stocks and ETFs, please watch the short video above.
Disclosure: Neena owns SOXX and XSD in the ETF Investor Portfolio.
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Intel Corporation (INTC) : Free Stock Analysis Report
Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report
Microsoft Corporation (MSFT) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Broadcom Inc. (AVGO) : Free Stock Analysis Report
Taiwan Semiconductor Manufacturing Company Ltd. (TSM) : Free Stock Analysis Report
VanEck Semiconductor ETF (SMH): ETF Research Reports
iShares Semiconductor ETF (SOXX): ETF Research Reports
SPDR S&P Semiconductor ETF (XSD): ETF Research Reports
Invesco PHLX Semiconductor ETF (SOXQ): ETF Research Reports
Meta Platforms, Inc. (META) : Free Stock Analysis Report
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Original: MSFT Feed: Can Semiconductor ETFs Continue to Shine in 2024?