Investing in semiconductors is highlighted as a strategic way to capitalize on the artificial intelligence boom, as stated by VanEck’s CEO. According to Jan van Eck, semiconductors have become central to the AI industry. VanEck’s VanEck Semiconductor ETF (SMH), which monitors 25 major chipmakers in the U.S., has experienced a 21% increase in value this year, although it has dropped by nearly 6% this month, led by companies like Intel, AMD, and On Semiconductor.
Nvidia, the fund’s top holding, has seen its shares rise by almost 70% due to a surge in demand for its AI processors, despite experiencing a 7% decrease since the beginning of the month. Van Eck believes that this temporary weakness will not affect the long-term potential of AI chips, which could lead to sustainable returns for investors. He notes that the growing interest in AI chips could pave the way for lasting profitability in the industry.
ETF Action founding partner Mike Akins also sees promise for investors. He emphasizes the limited competition among top chipmakers, which could help sustain the industry. Akins suggests that monitoring semiconductor fund flows could provide insights into future performance, advising investors to consider flows as a contrarian indicator for potential investment opportunities.
Overall, semiconductors are positioned as a key player in the AI industry, presenting opportunities for investors to capitalize on the growing demand for AI technology.
Investing in semiconductors is seen as a strategic move to capitalize on the artificial intelligence boom, with VanEck’s CEO Jan van Eck stating that semiconductors have become the heart of the AI trade. The VanEck Semiconductor ETF (SMH) has seen a 21% increase in value this year, although it has fallen by nearly 6% this month due to declines in top holdings such as Intel, AMD, On Semiconductor, and Nvidia. Despite recent weakness, van Eck believes that the high demand for AI chips could lead to more consistent returns for semiconductor companies in the long term. Mike Akins of ETF Action also sees opportunities in the semiconductor sector, highlighting the limited competition for top chipmakers and the ability to control pricing points as key factors for sustained growth. Akins advises investors to monitor semiconductor fund flows as an indication of future performance, suggesting that depressed flows could signal buying opportunities while extended flows may warrant caution.
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