Throughout the bull market for tech and artificial intelligence (AI) of the past few years, semiconductor stocks have been the leaders. That narrative has changed in 2026 as investors grow more concerned about how much money is being spent on AI development and whether valuations have become stretched too far. Semiconductor ETFs still aren't too far off all-time highs, but it looks like momentum has clearly shifted away from tech and growth stocks. That doesn't mean this group can't keep moving higher, bu ...

Quick Read Invesco QQQ (QQQ) fell to a 12-week low at $594.17 on February 17. The fund dropped 6.7% from its January peak. Microsoft (MSFT) plunged 18.02% year-to-date to $396.49 despite beating earnings expectations. AMD dropped 7.96% and NVIDIA fell 4.55% as semiconductors led the broader selloff. A recent study identified one single habit that doubled Americans’ retirement savings and moved retirement from dream, to reality. Read more here. The Invesco QQQ Trust (NASDAQ:QQQ) has plunged to it ...

Core Viewpoint - The semiconductor sector is experiencing significant volatility, with notable movements in stock prices, particularly in the iShares Semiconductor ETF and individual companies like Sandisk, Micron Technology, On Semiconductor, and Western Digital [1]. Group 1: Market Performance - The iShares Semiconductor ETF increased by 1.9% [1]. - The chip stock index initially rallied at the market open but subsequently experienced a sharp pullback before making another upward push [1]. Group 2: Key Companies - Sandisk, Micron Technology, On Semiconductor, and Western Digital were highlighted as some of the top-performing stocks within the S&P 500 [1].

Core Viewpoint - The S&P 500 index experienced fluctuations shortly after market opening, influenced by major tech stocks like Alphabet and Amazon, which contributed to a decline in the index despite a majority of stocks rising [1]. Group 1: Market Performance - The S&P 500 was moving in and out of negative territory after opening higher [1]. - The Nasdaq Composite dipped by 0.2% [1]. - The Dow Jones Industrial Average increased by 334 points, or 0.6% [1]. Group 2: Impact of Tech Stocks - Alphabet and Amazon.com were leading large tech stocks lower, impacting overall market performance [1]. - The iShares Semiconductor ETF also saw a decline of 0.8% [1].

Core Viewpoint - The software sector is experiencing a significant decline, contributing to a broader downturn in the Nasdaq Composite index [1]. Group 1: Market Performance - The Nasdaq Composite index fell by 1.3% following a selloff in software stocks [1]. - The iShares Expanded Tech-Software Sector ETF decreased by 3.5% [1]. - The S&P 500 index declined by 0.7%, while the Dow Jones Industrial Average saw a slight increase of 41 points, or 0.1% [1]. Group 2: Related Sector Performance - The iShares Semiconductor ETF experienced a drop of 1.9% [1]. - The Roundhill Magnificent Seven ETF fell by 1.1% [1].

Core Insights - The semiconductor sector has been a significant beneficiary of the AI boom, with the VanEck Semiconductor ETF (SMH) and iShares Semiconductor ETF (SOXX) being the two largest ETFs for investors seeking exposure to this market [1][7] Category Exposure - The primary distinction between the two ETFs lies in their concentration levels, with both tracking semiconductor manufacturers based on market capitalization and holding approximately 25-30 positions [2] - The VanEck ETF allows for unconstrained weighting, leading to substantial allocations for major companies like Nvidia and Taiwan Semiconductor Manufacturing, which together represent about one-third of the portfolio [3] - In contrast, the iShares ETF imposes caps on individual holdings, limiting the top five securities to 8% and other positions to 4%, while also capping American depositary receipts (ADRs) to a maximum of 10% of the portfolio [4][5] Investment Verdict - The choice between SMH and SOXX depends on the investor's preference for exposure to larger companies, with the VanEck ETF being more concentrated and tilted towards major semiconductor firms [5][6] - Given the current market conditions favoring large-cap stocks, the VanEck Semiconductor ETF is viewed as the more advantageous option at this time, although a more diversified approach may be preferable in the long term [6][8]

Core Viewpoint - A new ETF issuer, VegaShares, has filed with the SEC for 16 highly leveraged funds, despite previous warnings from the SEC regarding the violation of leverage limits [2][3]. Group 1: SEC Filings and Regulatory Context - VegaShares is attempting to launch 16 funds that would utilize 3X or 4X leverage on various large ETFs, amidst a backdrop of at least nine other companies having received warning letters from the SEC for similar filings [2]. - The SEC has indicated that leverage beyond 200% is incompatible with Rule 18f-4, raising questions about how these new filings will comply with regulatory standards [3]. Group 2: Market Implications and Strategies - The timing of these filings is seen as perplexing, suggesting that issuers may be engaging in regulatory brinkmanship or betting on the SEC's leniency regarding leverage rules [3][4]. - The investment advisor behind VegaShares, Vega Capital Partners, has not previously launched any ETFs and has not commented on the filings [4]. Group 3: Specific Fund Details - The initial prospectuses filed include five funds seeking 3X exposure to various ETFs such as the Vanguard Total World Stock Index Fund ETF (VT) and VanEck Gold Miners ETF (GDX) [5]. - Additionally, there are 11 funds seeking 4X exposure to ETFs including QQQ, SPY, and iShares Russell 2000 ETF (IWM) [5].

Core Insights - The iShares Semiconductor ETF (SOXX) focuses specifically on the semiconductor sector, while the State Street Technology Select Sector SPDR ETF (XLK) provides diversified exposure across the entire technology sector [2][8] Cost & Size - SOXX has an expense ratio of 0.34% and assets under management (AUM) of $17 billion, while XLK has a lower expense ratio of 0.08% and AUM of $93 billion [3][4] - Both funds have similar dividend yields, with SOXX at 0.55% and XLK at 0.53% [4] Performance & Risk Comparison - Over the past five years, a $1,000 investment in SOXX would have grown to $2,483, compared to $2,220 for XLK [5] - SOXX experienced a maximum drawdown of -45.75%, while XLK had a lower maximum drawdown of -33.56%, indicating higher risk for SOXX due to its narrower focus [5] Holdings Overview - XLK tracks the Technology Select Sector Index, including 70 leading U.S. technology stocks, with top holdings like Nvidia, Apple, and Microsoft making up nearly 40% of its assets [6][7] - SOXX is concentrated on the semiconductor industry, holding only 30 companies, with major positions in Nvidia, Advanced Micro Devices, and Micron Technology [7]

Core Insights - The Vanguard Information Technology ETF (VGT) provides broader sector exposure with over 300 tech-related holdings, while the iShares Semiconductor ETF (SOXX) focuses on 30 leading U.S. semiconductor stocks, appealing to different investment strategies [2][10] Cost & Size - SOXX has an expense ratio of 0.34% and AUM of $16.7 billion, while VGT has a lower expense ratio of 0.09% and AUM of $130.0 billion [3] - The one-year return for SOXX is 41.81%, compared to VGT's 16.10%, and SOXX offers a higher dividend yield of 0.55% versus VGT's 0.41% [3][4] Performance & Risk Comparison - SOXX has a max drawdown of -45.75% over five years, while VGT's max drawdown is -35.08% [5] - The growth of $1,000 over five years is $2,346 for SOXX and $2,154 for VGT, indicating stronger performance for SOXX despite its higher risk [5] Holdings Overview - VGT includes 322 stocks with top holdings in Nvidia, Apple, and Microsoft, reflecting long-term stability over its nearly 22-year history [6] - SOXX is concentrated on 30 companies, heavily weighted towards Broadcom, Advanced Micro Devices, and Nvidia, making it suitable for investors seeking precise exposure to U.S. chipmakers [7] Investment Implications - VGT's broader portfolio and lower expense ratio may appeal to cost-conscious investors, while SOXX's higher one-year return and dividend yield may attract income-driven investors [4][9] - Greater diversification in VGT results in less price volatility, with a lower beta compared to SOXX, which may provide an advantage in a declining market [11]

Group 1: Market Overview - U.S. tech ETFs experienced a rally due to a cooler-than-expected inflation figure, which dampened Treasury yields [1][2] - The Consumer Price Index (CPI) for November was reported at 2.7% year-over-year, alleviating inflation concerns, while the core inflation rate softened to 2.6%, the lowest since March 2021 [2] - The 10-year Treasury yield moved closer to 4.11%, providing strong support for long-duration growth assets [2] Group 2: Semiconductor Sector Performance - The VanEck Semiconductor ETF (SMH) saw a 2.4% increase, benefiting from strong earnings reported by Micron Technology Inc [3][4] - The iShares Semiconductor ETF (SOXX) advanced by 3%, as easing inflation allowed the Federal Reserve to support growth without reigniting price pressures [4] - Micron's earnings beat reinforced optimism regarding memory pricing and AI-driven demand, lifting the broader chip complex [4] Group 3: Broader Tech Sector Gains - Nasdaq-linked ETFs, including the Invesco QQQ Trust ETF, showed gains due to lower yields, which lifted valuations in megacap tech companies [5] - The Vanguard Growth Index Fund ETF gained traction, reflecting renewed investor appetite for companies with longer-dated cash flows, as inflation effects dampened and bond yields receded [6] Group 4: Investor Sentiment and Risks - Despite the enthusiasm in semiconductor ETFs, there are concerns about valuations having little margin to withstand potential disappointments if inflation figures and earnings trends turn negative [7] - Some investors are pairing tech-intensive ETFs with equal-weight or low volatility strategies to hedge against downside risk [7] - Cooling inflation and reduced yields are currently seen as potent catalysts for tech ETFs, with semiconductors leading the charge [8]