Nvidia Corp's (NASDAQ:NVDA) $5 billion purchase of Intel Corp (NASDAQ:INTC) shares may not have made a big splash in the stock market, but it has significant implications for semiconductor ETFs. This week, Nvidia revealed that it acquired over 214 million Intel shares in a private placement that was first announced in September. This deal recently received approval from U.S. antitrust regulators. Nvidia’s stock dipped slightly, while Intel's stock remained fairly stable. This suggests that investors are sti ...

Core Insights - The AI boom is significantly driving growth in semiconductor stocks and related ETFs, with a strong outlook despite potential bubble concerns [1][2][4] - Major tech companies are making substantial investments in AI, with a projected cumulative spending of $364 billion in 2025, up from $325 billion [3] - The semiconductor industry is experiencing remarkable growth, with the Morningstar Global Semiconductors Index increasing by 34% year-to-date, outperforming the broader U.S. market [5][6] AI Sector Growth - Global spending on AI is expected to reach nearly $1.5 trillion by the end of 2025, with projections to exceed $2 trillion by the end of 2026 [2][4] - The integration of AI across various industries, including banking and healthcare, is contributing to its robust growth prospects [4] Semiconductor Industry Dynamics - Advanced semiconductors are essential for AI applications, leading to significant growth in the semiconductor sector [5] - AI chip revenues are expected to grow approximately fourfold over the next few years, with a compound annual growth rate of 40% through 2028 [6] Semiconductor ETFs - Investing in semiconductor ETFs offers a strategic way to capitalize on the AI growth trend while managing risks associated with individual stocks [7][8] - Key semiconductor ETFs include: - VanEck Semiconductor ETF (SMH) with net assets of $33.81 billion and a year-to-date return of 41.6% [10] - Strive U.S. Semiconductor ETF (SHOC) with net assets of $128 million and a year-to-date return of 42.6% [11] - iShares Semiconductor ETF (SOXX) with net assets of $15.26 billion and a year-to-date return of 34.9% [12] - Invesco PHLX Semiconductor ETF (SOXQ) with a net asset value of $53.35 and a year-to-date return of 36.7% [13]