The iShares Semiconductor ETF (SOXX) has climbed 70% in 2026 as of the market close on Aug. 25, far outpacing the S&P 500's 12.1% gain and the Nasdaq-100's 15.6% gain. Nvidia, Micron Technology, and AMD sit atop the fund's holdings.
The iShares Semiconductor ETF's 70% year-to-date gain compares with 12.1% for the S&P 500 and 15.6% for the Nasdaq-100 through the close on Aug. 25. The fund holds 30 U.S. companies that design, manufacture, and distribute chips.
An AI-heavy portfolio beats both benchmarks
The fund's three largest positions sit in artificial intelligence hardware. Nvidia carries an 8.98% weighting, Micron Technology 8.53%, and Advanced Micro Devices 8.05%, giving the three stocks more than a quarter of the fund's assets combined.
Nvidia's data center GPUs currently lead the industry in AI training and inference performance, and chief executive Jensen Huang has said every leading frontier AI company plans to adopt the company's new Vera Rubin systems, which just started shipping. AMD has positioned itself as a top competitor with Helios, a fully integrated data center rack built around its MI450 GPUs. Micron, meanwhile, supplies high bandwidth memory that keeps data flowing to GPUs without the bottlenecks that would otherwise slow AI chatbots and agents.
Since the AI boom gathered momentum in early 2023, Nvidia, Micron, and AMD have delivered a median return of 1,360% over three and a half years, compared with a 99% return in the S&P 500. The fund also holds Broadcom and Taiwan Semiconductor Manufacturing outside its top three positions.
Track record predates the current rally
The fund's 2026 performance follows a longer pattern rather than a single-year spike. The iShares Semiconductor ETF has returned 14.2% annually since it launched in 2001, versus roughly 9% a year for the S&P 500 over the same period. The fund carries a 0.33% expense ratio, a 0.28% dividend yield, and $42 billion in assets under management.
Chip shortages and demand caps raise caution flags
Chipmakers are currently benefiting from severe supply shortages that let them dictate prices and expand margins, but every company in the industry is racing to add manufacturing capacity, so the pricing power may not last. Lawmakers in more than a dozen U.S. states have introduced legislation to temporarily ban new data center construction while they weigh the social, financial, and environmental impact. Rising chip costs are also pushing companies including Walmart, Uber Technologies, and Amazon to impose usage caps on employees.
A recent UBS Group survey found around 60% of businesses are now directing tasks to cheaper, more efficient AI models to control costs, models that typically need less computing power.
Source: Fool
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