Core Viewpoint - The SPDR Semiconductor ETF (XSD) has gained 43.15% over the past year due to increased AI infrastructure spending, but its equal-weight structure creates challenges as legacy players like Intel lag behind [1] Group 1: ETF Performance - The XSD ETF is up 11.85% year-to-date and has seen significant gains driven by AI demand [1] - Micron Technology's revenue surged 57% year-over-year to $13.64 billion in Q1 FY26, highlighting the strong demand for high-bandwidth memory [1] - The equal-weight structure of XSD means that underperformers like Intel can drag down overall returns, despite strong performances from other stocks [1] Group 2: Macro Factors - The trajectory of AI infrastructure spending is crucial for the continued success of XSD, with NVIDIA reporting high demand for cloud GPUs [1] - Micron's gross margins for Cloud Memory reached 66%, indicating strong pricing power driven by AI demand [1] - Geopolitical risks, particularly concerning Taiwan's semiconductor production, could significantly impact the global supply chain if disrupted [1] Group 3: Micro Factors - XSD's quarterly rebalancing can create tension between sector leaders and laggards, affecting overall fund performance [1] - Intel's recent decline of nearly 6% contrasts with Micron's 2.59% increase, which could erode returns until the next rebalance [1] - The fund's equal-weight discipline requires selling outperformers to buy laggards, which may limit potential gains if AI momentum continues [1]

It's been a bumpy start to the year for the AI trade as fears about whether massive investments in artificial intelligence will actually pay off permeate markets and weigh on some of the hottest names in the sector. We have Morning Star senior equity analyst Brian Kel who covers the semiconductor industry here to walk us through what it all means. Thank you so much for joining me Brian.>> Hi Sarah, happy to be here. So, I suspect for many investors this kind of ongoing pullback in tech stocks is very top of ...

Finally! A Value ETF Tripled the S&P 500's Return And Investors Can Take A Victory Lap - 24/7 Wall St.[S&P 5006,865.40 -0.22%][Dow Jones49,512.90 -0.29%][Nasdaq 10024,815.80 -0.28%][Russell 20002,647.72 -0.40%][FTSE 10010,605.20 -0.98%][Nikkei 22557,148.00 -0.69%][Investing]# Finally! A Value ETF Tripled the S&P 500's Return And Investors Can Take A Victory Lap### Quick ReadiShares MSCI USA Value Factor ETF (VLUE) returned 38.25% over one year through February 2026. VLUE more than tripled SPY's performance. ...

Filling your portfolio with long-shot stocks isn't a great idea. Such investments have high risks of failure and may not pan out. However, if you want to devote a small fraction of your portfolio (say 5% to 10% of its value) to stocks with huge upside and spread your bets out among them, then I think this can be a fun investment strategy. It's not for everyone. If you start having heart palpitations any time you see a stock you own fall by 50% or more, then I wouldn't encourage you to invest like this. B ...

The market is really concerned about one thing right now: artificial intelligence (AI) spending. It's understandable; many of the AI hyperscalers are dumping a boatload of money into this technology, and there hasn't really been a return on investment. The market would rather see some of that money go toward proven technologies or strategies that can provide a return on capital. I think AI will provide that, but investors have to be patient. The market isn't usually a patient entity. For the most part, e ...

Core Insights - Nvidia's strategic investment portfolio is gaining attention from investors as it focuses on companies that enhance its AI ecosystem [1] Group 1 - The company is increasingly targeting investments that align with its artificial intelligence initiatives [1]

Core Insights - The adoption of Nvidia CPUs indicates a potential major transition towards Arm-based chips in data centers [1] Industry Implications - The shift to Arm-based architecture could enhance performance and energy efficiency in data centers, aligning with industry trends towards more efficient computing solutions [1] - Nvidia's move may influence other tech companies to explore Arm-based options, potentially reshaping competitive dynamics in the semiconductor market [1]

Core Insights - Nvidia has signed a multiyear deal to sell millions of AI chips to Meta Platforms, which includes current and future products [1] - The deal is estimated to be worth $50 billion and includes Nvidia's Blackwell and upcoming Rubin AI chips, as well as Grace and Vera processors [1] - Nvidia aims to expand its market presence in AI and data center processing, competing with Intel and AMD [1] Company Developments - Nvidia's Grace processors reportedly use half the power for tasks like running databases, with further improvements expected from the Vera processors [1] - Meta is concurrently developing its own AI chips and is in discussions with Google regarding the use of Tensor Processing Units (TPUs) [1] - The deal highlights Nvidia's strong business relationship with Meta, which is believed to account for a significant portion of Nvidia's revenue [1]

Core Insights - Wall Street anticipates a significant increase in spending by major hyperscalers, with projections indicating over $700 billion in budgets for 2026 [1] Group 1: Spending Plans of Hyperscalers - The five largest hyperscalers—Amazon, Alphabet, Microsoft, Meta Platforms, and Oracle—are facing increasing backlogs of compute demand for their cloud services [2] - The projected capital expenditure budgets for 2026 are as follows: Amazon at $200 billion, Alphabet at $180 billion, Microsoft at $151 billion, Meta Platforms at $125 billion, and Oracle at $58.8 billion [5] - Year-over-year growth in spending for these companies is substantial, with Alphabet showing a 97% increase, Amazon at 56%, Oracle at 66%, Meta Platforms at 73%, and Microsoft at 28% [5] Group 2: Focus on AI Data Centers - A significant portion of the capital expenditure is directed towards building and outfitting new AI data centers, with Amazon also investing in its logistics networks [6] - Microsoft CFO indicated that approximately two-thirds of their capital expenditure is allocated to short-lived assets, primarily GPUs and CPUs, suggesting a similar trend among other hyperscalers [8]

Core Insights - Intel has experienced a significant decline in its business performance despite a rebound in stock price, with the company still reporting losses in 2025 [1][9] - The stock market's positive outlook on Intel suggests expectations for future improvement, although historical performance indicates challenges that need to be addressed [2] Financial Performance - Intel's peak sales occurred in 2021, reaching $79 billion, but gross margin fell to 55.5% due to rising costs, and operating margin decreased to 24.6% [4] - In 2022, revenue dropped by 20% and net income fell nearly 40% due to decreased consumer demand and high inflation [5] - The decline continued in 2023, with net income decreasing by nearly 80% and sales falling another 14%, alongside loss of market share to competitors like Nvidia and AMD [6] - In 2025, Intel's gross margin improved slightly to 34.8%, but the company still reported a GAAP loss of approximately $300 million, with flat revenue overall [9] Leadership Changes - The resignation of former CEO Pat Gelsinger followed significant impairment and restructuring charges totaling $18.7 billion in 2024, despite attempts to cut costs [7] - Lip-Bu Tan was appointed as the new CEO in March 2025, bringing prior experience from his time on Intel's board [8] Strategic Focus - Tan emphasizes the importance of central processing units (CPUs) in the AI era, contrasting with competitors who focus on graphics processing units (GPUs) [11] - The success of Intel's strategic plan under Tan will be crucial for the company's recovery and future performance [12]