The VanEck Semiconductor ETF (SMH) continues to dominate Wall Street, boasting a remarkable three-year total return exceeding 350%, making it the top-performing non-leveraged ETF in the semiconductor sector. This surge is largely driven by megacap chipmakers like Nvidia, Taiwan Semiconductor Manufacturing, and Broadcom, which have propelled the sector forward. As the artificial intelligence narrative expands beyond Nvidia, the entire industry is expected to see nearly $1 trillion in annual sales, with projections suggesting this could double by 2036.

The ETF’s market-cap-weighted structure heavily favors its largest holdings, including Nvidia (16%) and TSMC (9%), which means its performance is closely tied to these industry leaders. While smaller semiconductor firms are gaining traction, the expectation is that the top players will continue to drive growth, particularly as the sector shifts back to earnings-based evaluations.

For market professionals, the VanEck Semiconductor ETF presents a compelling investment opportunity, especially for those looking to capitalize on the anticipated ongoing demand in the semiconductor space.

Source: fool.com