VanEck Semiconductor ETF ( $SMH ) has fallen by 8.57% in the past week. It has experienced a 5-day net outflow of $7.84 billion.
This is due, in part, to market sentiment on some of the ETF’s largest holdings. For example:
- Nvidia Corporation spent the week at the center of the AI chip story, with fiscal Q1 revenue surging 85% to $81.62 billion and data-center sales hitting $75.2 billion, plus guidance for $91 billion next quarter. Despite an 8% share-price pullback amid a broader tech selloff and worries about heavy AI spending, analysts maintain a Strong Buy rating with targets implying roughly 60% upside as Nvidia’s GPUs and software remain the backbone of AI infrastructure.
- Taiwan Semiconductor Manufacturing Company Limited saw its shares fall about 7.5% as options traders turned defensive and volatility rose, reflecting concern over a massive new capex cycle and near-term margin pressure. Even so, TSMC is committing over $30 billion to expand advanced manufacturing and packaging for AI chips, and major banks like BofA now forecast close to 40% annual sales growth in 2026–2027, backing Buy/Outperform calls and a higher price‑target path despite short‑term turbulence.
- Broadcom Inc. continued to emerge as a prime beneficiary of AI spending, posting record fiscal Q2 revenue of $22.2 billion, with AI-linked semiconductor sales up 143% to $10.8 billion and guidance raised for the full year. A key catalyst was OpenAI’s Jalapeño accelerator, a custom chip designed by OpenAI but manufactured by Broadcom that could cut AI compute costs by about 50%, boosting AVGO shares and reinforcing a Strong Buy consensus with price targets suggesting roughly 35% upside.