Semiconductor ETF up 89% this year as chip industry eyes $1T revenue threshold
Eddie Ghabour, CEO of Key Advisors Wealth Management, expects a market correction this summer after a rapid increase in technology stocks, advising investors to prepare for uncertain trades and look for buying opportunities.
So far this year, semiconductors and artificial intelligence (AI) infrastructure have dominated the exchange-traded fund (ETF) space. For example, the iShares Semiconductor ETF is up 89% year to date. Given the huge interest – and investment – in AI, this makes sense.
What caused the semiconductor boom
Semiconductors and AI reinforce each other in a tight loop. AI relies on highly advanced chips to function. Now, AI is changing how chips are designed and where they are manufactured. In short, AI is designed to perform tasks that normally require human intelligence, and semiconductors are the physical tools that enable it to do so.
Driven by AI and data center demand, the chip industry is in a strong position. (Lyu Bin/VCG via Getty Images)
TAP THE HUMANOID ROBOTICS BOOM WITH THIS ETF
Driven by AI and data center demand, the chip industry is in a strong position. With major cloud providers spending heavily on AI infrastructure, the entire semiconductor value chain is being upended. Strong demand for central processors, graph processors, power management, memory and manufacturing equipment is like catnip for investors – so much so that semiconductor revenue reached $298.5 billion in the first quarter of 2026, up a staggering 25% from the fourth quarter of 2025.
| A ticker | Security | Finally | Change | change % |
|---|---|---|---|---|
| SOXX | ISHARES TRUST ISHARES SEMICONDUCTOR ETF | 571.45 | +31,68 |
+5.87% |
Taking a close look at rising ETFs
As a passively managed ETF, the iShares Semiconductor ETF provides exposure to large and mid-cap companies, particularly US-listed stocks. It tracks the NYSE Semiconductor Index and currently holds a concentrated basket of 30 stocks.
Top holdings include industry leaders such as Micron Technology, Advanced Micro Devices and Marvell Technology.
WHAT ARE ETFS AND HOW ARE THEY CHANGING THE WAY AMERICANS INVEST?
With a reasonable expense ratio of 0.34%, or $34 per $10,000 invested annually, SOXX provides access to a narrowly focused group of sector-specific ETFs.
It is predicted to reach $1 trillion by the end of 2026
IDC’s April forecast predicted that the semiconductor market would surpass the $1 trillion revenue threshold by the end of this year. However, investing in a semiconductor ETF is not the right move for everyone.
As an investor, it is important to remember that anything can happen. For example, AI may lose popularity for any number of reasons, from hype fatigue to slower-than-expected acquisitions or bottlenecks in data center capacity and infrastructure. Like all technologies, semiconductor stocks and ETFs can be volatile, and there is no guarantee that they will continue to thrive.
HOW ETFS CAN WORK FOR RETIREMENT SOLUTIONS
As a passively managed ETF, the iShares Semiconductor ETF provides exposure to large and mid-cap companies. (Brendan McDermid/Reuters)
Before you take the leap, look past the current hype and make sure you look closely enough under the hood to know exactly what you’re buying. If you choose to invest in a semiconductor ETF, it should be part of a diversified portfolio that you intend to hold for the long term.
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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 the iShares Trust – iShares Semiconductor ETF. The Motley Fool has a policy of disclosure.
