As artificial intelligence (AI) continues to revolutionize industries, investing in semiconductors has been highlighted as a strategic move by VanEck’s CEO, Jan van Eck. According to van Eck, semiconductors have become the central focus of the AI trade, making them a key player in the booming AI sector.
VanEck Semiconductor ETF (SMH) has emerged as a top choice for investors looking to capitalize on this trend, as it tracks 25 of the largest chipmakers in the country. The ETF has seen a 21% increase in value this year, showcasing the potential of the semiconductor sector, despite a recent 6% drop led by companies like Intel, AMD, and On Semiconductor.
The fund’s top holding, Nvidia, has experienced a remarkable 70% surge in share value this year due to high demand for its AI processors. Van Eck believes that this temporary downturn in chipmaker stocks presents an opportunity for long-term growth, as the industry shifts from a cyclical to a growth-focused market with more sustainable revenue streams.
ETF Action founding partner Mike Akins echoes this sentiment, emphasizing the limited competition in the semiconductor space that allows for pricing control and potential sustained growth. Akins advises investors to monitor semiconductor fund flows as an indicator of future performance, with depressed flows potentially signaling a buying opportunity.
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Disclaimer: The information provided is for educational and informational purposes only and should not be considered investment advice. Always conduct thorough research and consult with a financial advisor before making investment decisions.
