New York, May 5, 2026, 11:07 EDT
VanEck Semiconductor ETF was hovering close to all-time highs on Tuesday, fueled by ongoing strength in artificial intelligence chipmakers. That surge sent the sector-heavy fund well beyond the S&P 500’s pace. SMH traded at $520.28 late in the morning, marking a $13.49 jump from Monday’s finish and just shy of its $522.38 intraday peak. By comparison, SPY, tracking the S&P 500, edged up $4.71.
This shift is significant now, as SMH has turned into a go-to, highly liquid option for investors looking to access the hardware side of artificial intelligence—tech that powers data processing and tasks like coding, search, or language generation. According to VanEck, the fund’s net asset value per share has surged 40.69% since the start of this year, and it’s up a hefty 140.37% for the one-year stretch through May 4. Total net assets? $59.12 billion.
SMH jumped 32.2% in April, according to The Motley Fool’s Billy Duberstein, who cited S&P Global Market Intelligence. A tentative U.S.-Iran ceasefire and robust chipmaker earnings powered the rally. The same report pointed out semiconductors outpaced most non-energy sectors as earnings underscored ongoing AI-driven demand.
The way the fund is built is a big part of what’s behind the sharp move. As of May 4, VanEck listed 26 stocks, but almost half the portfolio sits in just five: Nvidia takes the largest slice at 16.91% of assets, followed by Taiwan Semiconductor Manufacturing Co. at 10.64%, Broadcom at 7.93%, Intel at 7.12%, and Advanced Micro Devices at 5.95%.
Apple shares drew attention Tuesday after Bloomberg News, via Reuters, said the company has talked with both Intel and Samsung Electronics about potentially making its primary device chips—though Apple hasn’t placed any orders yet and is reportedly wary of straying from its mainstay supplier, TSMC, due to concerns about scale and reliability. Intel, a major holding in SMH, surged $13.72 to finish at $109.50.
SMH wasn’t the only one moving higher. On Tuesday, iShares Semiconductor ETF and Invesco PHLX Semiconductor ETF—both chip-focused rivals—climbed too. In contrast, the broader Invesco QQQ Trust and SPY logged smaller gains. For investors, direct chip exposure continued to command a premium over broader tech or index bets.
Earnings momentum hasn’t let up, drawing buyers back in. TSMC reported first-quarter revenue in U.S. dollars up 40.6% year-over-year to $35.90 billion. Net income and diluted EPS climbed 58.3%. “Strong demand for our leading-edge process technologies” drove the quarter, Chief Financial Officer Wendell Huang noted. TSMC
TSMC lifted its full-year revenue forecast and said it would boost capital expenditures, aiming to keep up with surging orders for high-end AI chips. CEO C.C. Wei described AI-linked demand as “extremely robust” in a call with analysts. Reuters cited Ben Barringer, Quilter Cheviot’s technology research head, who said TSMC’s plants were “running hot” while AI momentum kept pushing results higher. Reuters
It’s not just a single firm seeing this appetite. SEMI’s CEO Ajit Manocha told Reuters on Tuesday that worldwide chip demand looks solid for this year, even as supply hiccups and geopolitical tensions persist. Raw-material shortages could still pose challenges down the line. “This year is probably in the bag,” he said. Reuters
24/7 Wall St. offered a look from the other side: SMH has surged about 2,041% over the past decade, easily outpacing SPY’s 249.56% rise, delivering hefty rewards for shareholders. But, the article flagged that the latest run-up has lured in buyers at steeper prices. Fund concentration is another risk, it noted—Nvidia’s results alone can send SMH soaring or tumbling off a single earnings print.
The risk here isn’t complicated—and it’s anything but minor. Semiconductors run on cycles; when customers scale back or shelves start to fill, sales and profits can drop fast. If AI data-center investments taper, chip supply headaches get worse, or investors turn wary about valuations running ahead of actual earnings, the same heavyweights that drove up SMH could end up dragging it lower. Reuters flagged ongoing shortages in raw materials like helium and bromine as another headache for chipmakers.
Investors are sticking with AI hardware, seeing it as a straightforward growth story right now. “AI-driven spending will likely continue to do the heavy lifting” for S&P 500 earnings, especially in tech, Jeff Buchbinder, chief equity strategist at LPL Financial, told Reuters. Appetite for SMH remains strong — but there’s not much tolerance for a letdown. Reuters
