How is SMH stock faring? The VanEck Semiconductor ETF has gained 2.3% over the past five days and remains up nearly 50% year-to-date.
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What Moved the Market
The SMH ETF tracks the performance of the MVIS US Listed Semiconductor 25 index. Recently, it has drawn considerable attention due to high-profile deals being conducted in the AI sector.
The SMH ETF is moving lower primarily because most of its holdings are trending lower in pre-market trading today, with the sector likely experiencing some correction pressure. Investors are worried that tech companies’ prices are too high after a big rally this year. Some companies reported solid earnings, but many stocks are still seen as overvalued, leading investors to sell stocks, such as Palantir Technologies (PLTR).
Moreover, top Wall Street leaders from Goldman Sachs (GS) and Morgan Stanley (MS) have warned that the market could see a 10% to 20% correction in the next one-to-two years, adding to the cautious mood.
Today’s SMH ETF Performance
According to TipRanks’ unique ETF analyst consensus, which is based on a weighted average of analyst ratings on its holdings, SMH is a Moderate Buy. The Street’s average price target of $386.60 implies an upside of about 5.6%.
Currently, SMH’s five holdings with the highest upside potential are STMicroelectronics (STM), Synopsys (SNPS), Microchip Technology (MCHP), NXP Semiconductors (NXPI), and Texas Instruments (TXN).
Its five holdings with the greatest downside potential are Intel (INTC), Applied Materials (AMAT), Micron (MU), Teradyne (TER), and Advanced Micro Devices (AMD).
Revealingly, SMH’s ETF Smart Score is Eight, implying that this ETF is likely to outperform the market.
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