Massive AI Boom Sends Semiconductor ETF Skyrocketing: It's Not Just Nvidia

The recent artificial intelligence boom has reached different sectors, industries and corporations, with semiconductor stocks taking the lead.

Key Figures From The 2023 Semiconductor Boom

The VanEck Semiconductors ETF SMH, an exchange traded fund that invests in the 25 largest chipmakers, has posted a 44% rise year-to-date, with a 17% increase recorded in the last month alone.
The VanEck Semiconductors ETF stands out due to the exceptional market breadth. Every stock within the ETF is generating positive returns in 2023, reflecting a widespread rally across the chipmaking industry.
This remarkable rise has driven the fund's assets under management to new highs, hitting $9.54 billion at the end of May. This exceeds the previous high of $9.3 billion achieved in March 2022.

In terms of investor interest, May 2023 proved to be a particularly positive month for the VanEck Semiconductors ETF, which attracted substantial net inflows of $463 million.

NVIDIA Corp. NVDA stands out as a significant driver of the SMH's performance in 2023, with its shares soaring 164% year-to-date. Nvidia alone has contributed over 15 percentage points to the overall performance of the ETF. The company briefly hit a $1-trillion market cap May 30.

Notably, NVIDIA's growth has far outpaced its closest competitor, Advanced Micro Devices, Inc. AMD, which has risen 85% during the same period.

Other notable contributors to the industry's performance include Taiwan Semiconductor Manufacturing Company Ltd. TSM and Broadcom, Inc. AVGO.

The weakest performer among chipmakers was QUALCOMM Inc. QCOM, which has risen 5% year-to-date.

The 12-month forward price-to-earnings ratio of this ETF stands at 22.4x.

Chart: VanEck Semiconductor ETF Price Chart