VanEck Semiconductor ETF Sees Notable Gains
Shares of the VanEck Semiconductor ETF (NASDAQ: SMH) experienced a significant increase of 12% in January. In contrast, the S&P 500 index rose about 1.5% during the same period.
While the ETF dipped slightly in the first week of February, its year-to-date gain stood at 11.5% as of February 6, which is still quite impressive compared to the broader market’s gain of 1.4%.
As of February 5, the ETF is composed of 25 stocks, with the top ten holdings ranked below:
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Nvidia (NASDAQ: NVDA), a major player in the AI semiconductor industry.
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Taiwan Semiconductor Manufacturing Co., Ltd. (TSMC), recognized as the world’s largest chip foundry.
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Broadcom, a manufacturer of chips and software.
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Micron Technology, specializing in memory chips.
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ASML Holdings, a manufacturer of chip-making equipment.
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Lam Research, also in the chip equipment sector.
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Texas Instruments, a chip maker.
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Intel, known for its chip production.
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Applied Materials, another company in chip manufacturing equipment.
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Analog Devices, which also focuses on chip manufacturing.
In January, several of these stocks performed exceptionally well; three saw increases exceeding 30%, while two posted gains above 20%, which benefitted the ETF’s overall performance.
Micron Technology led the way with its stock surging 45.4% last month. Following a report of strong quarterly profits in December, Micron’s stock enjoyed steady growth in January, largely driven by high demand for memory chips influenced by the burgeoning AI sector.
During its fiscal first quarter ending November 27, Micron’s revenue increased by 57% year-over-year, totaling $13.64 billion, with adjusted earnings per share jumping 167% to $4.78. Growth in the cloud memory division was particularly notable, doubling sales to $5.3 billion and increasing operating margin significantly.
Other stocks, like ASML Holdings and Lam Research, also showed strong performance in January, rising by 33% and 36.4%, respectively, especially after TSMC reported results that exceeded Wall Street forecasts.
Notably, Nvidia is the largest holding in the VanEck Semiconductor ETF, comprising 18.3% of the portfolio as of February 5. TSMC follows as the second largest holding at 10.8%. Nvidia’s forthcoming earnings report could significantly impact the ETF’s performance.
Nvidia is set to release its fourth-quarter and full-year fiscal 2026 results on February 25, predicting sales of $65 billion, implying a year-over-year growth of 65%. The company also anticipates adjusted earnings per share of $1.50, marking a 69% increase.
Reflecting on the ETF’s performance, it returned 62.2% over the past year to February 6, vastly outperforming the S&P 500’s return of 15.4%. This might indicate a potential for great long-term success.
Finally, it’s essential to consider various factors before investing in the VanEck Semiconductor ETF, especially since there are other stocks that could offer substantial returns in the coming years.
