VanEck Semiconductor ETF

SMH

Market cap $50.6B

Leading AI stocks, including Equinix, Taiwan Semiconductor and others continue to gain amid persistent demand for AI infrastructure.

The VanEck Semiconductor ETF (SMH) is in sharp focus on Apr. 13 after the high-stakes US-Iran peace talks collapsed, dashing hopes of a diplomatic resolution in the Middle East. SMH is now flashing technical caution as its relative strength index (RSI) hovers in the late 60s, a level that suggests the asset is rapidly approaching overbought territory and may be due for a pull-back.

Markets have been uneven to start 2026. Major indexes have struggled to make sustained progress, former technology leaders have traded lower, stress in areas such as private credit has added to the noise and a hot conflict in the middle east compounds the uncertainty.

Following a recent ceasefire that has boosted market morale, tech stocks have experienced a notable rebound. Brook Dane, Goldman Sachs Asset Management's co-head of public tech investing, discusses his strategy for investing in tech stocks amid the relief rally.

The first quarter of 2026 was the moment the market stopped treating technology as a monolith. Beneath the big tech selloff grabbing headlines, a violent dispersion has been bubbling beneath.

Iran's strike on Qatar slashes helium supply, raising fears of chip disruption but also hinting at semiconductor ETF buying opportunities.

Mounting tensions in the Middle East have pushed Brent crude prices well over $100 a barrel, while Treasury yields remain stubbornly high at 4.25%. In response, ETF flows have fractured into a distinct ‘barbell' formation.

Thanks to the AI boom, semiconductors have been one of the market's top-performing sectors. But the AI earnings boom isn't nearly over, and valuations are still reasonable given the growth trajectory.

Investing in individual stocks requires staying on top of your portfolio and diversifying into many holdings, but you can also opt for a much simpler path with ETFs.

VanEck Semiconductor ETF remains a strong buy with a $577 price target for end-2026, reflecting continued sector dominance. SMH's concentrated exposure to industry leaders—NVDA, TSM, AVGO, MU, and ASML—positions it to capitalize on surging AI and memory demand. U.S. manufacturing expansion by SMH's top holdings mitigates geopolitical risks from Taiwan-China tensions, though China remains the main risk.