Buy These Top-Ranked Semiconductor ETFs as We Head Into 2026

Core Insights - The global semiconductor market experienced unprecedented growth in 2025, primarily driven by the AI revolution, which increased demand for high-performance computing chips [1][5] - Global semiconductor sales reached $72.7 billion in October 2025, reflecting a 27.2% year-over-year increase, with the Americas region seeing a remarkable 59.6% growth [2] - Major companies benefiting from this surge include NVIDIA, AMD, ASML, Broadcom, and Intel, contributing to rising values for semiconductor ETFs [3] Growth Catalysts - AI-Driven Demand: The need for chips to support AI models significantly boosted the Logic and Memory segments, leading to record revenues for memory manufacturers like Micron Technology [5] - Favorable Policy Adoption: The U.S. CHIPS and Science Act encouraged nearly $500 billion in private-sector investment in the semiconductor ecosystem by July 2025 [6] - Technological Transition: Continuous innovation in the industry is paving the way for advancements such as Gate-All-Around transistors and advanced packaging technologies [7] Future Outlook - The global semiconductor market is projected to grow over 25% in 2026, approaching the $1 trillion mark, with the U.S. expected to maintain its leading position [8] - Key growth drivers include the deployment of AI data center infrastructure, expansion of AI applications, increased penetration of semiconductor-intensive Electric Vehicles, and ongoing digital transformation [9] Investment Opportunities - Semiconductor ETFs are recommended for investors seeking diversified exposure to the semiconductor industry, mitigating risks associated with individual stocks [10] - iShares Semiconductor ETF (SOXX): Net assets of $17.5 billion, top holdings include AMD, AVGO, NVDA, MU, INTC, and ASML; year-to-date increase of 45.7% [11][12] - Invesco PHLX Semiconductor ETF (SOXQ): Market value of $804.9 million, top holdings include AVGO, NVDA, AMD, MU, INTC, and ASML; year-to-date increase of 48.8% [13] - VanEck Semiconductor ETF (SMH): Net assets of $37.67 billion, top holdings include NVDA, TSM, AVGO, MU, ASML, AMD, and INTC; year-to-date increase of 52.4% [14] - First Trust Nasdaq Semiconductor ETF (FTXL): Net assets of $1.38 billion, top holdings include MU, INTC, AVGO, NVDA, and AMD; year-to-date increase of 53.5% [15]