VanEck Semiconductor ETF

SMH

Market cap $41.6B

This market-cap weighted ETF nearly tripled the performance of the S&P 500. As a long-term outperformer, the semiconductor sector climbed as the AI boom continued.

The S&P 500 closed a winning year and is expected to climb as much as 20% this year.

The management fees of this fund are below industry averages. The fund has significantly outperformed the Nasdaq 100.

CNBC's "Closing Bell" team discusses whether the market technicals indicate that stocks can go higher and more with Jeff deGraaf, chairman and head of technical research at Renaissance Macro Research.

SMH is upgraded to a Buy, thanks to the durable multi-year AI spending trends through 2030, with the ETF providing diversified exposure and reduced volatility amid sector uncertainty. Micron and Advanced Micro Devices are likely to lead early 2026 gains, supported by the insatiable hyperscaler demand for memory (DRAM/HBM) and the new PC refresh cycle/growing strategic partnerships.

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Semiconductors have been one of the market's best-performing sectors. The largest semiconductor funds are the VanEck Semiconductor ETF (SMH) and the iShares Semiconductor ETF (SOXX).

Designed to provide broad exposure to the Technology - Semiconductors segment of the equity market, the VanEck Semiconductor ETF (SMH) is a passively managed exchange traded fund launched on December 20, 2011.

Chipmaking stocks rallied to kick off 2026, led by ASML, Intel and Micron Technology. The sector had a strong 2025 with the ongoing AI buildout as hyperscalers spent big to meet massive datacenter demand.