Motley Fool columnist Jeremy Bowman says VanEck Semiconductor ETF (SMH) would be his one fund addition, citing continued AI-chip demand. Nvidia and Taiwan Semiconductor Manufacturing account for 28% of the fund, giving it concentrated exposure to those chipmakers.
SMH tracks the MVIS U.S. Listed Semiconductor 25 Index. Its five largest holdings—Nvidia, Taiwan Semiconductor Manufacturing, AMD, Broadcom and Intel—make up about 45% of the fund. The article says SMH’s heavier weighting in Nvidia and Taiwan Semiconductor helps explain its outperformance against the iShares Semiconductor ETF.
Bowman says SMH’s price-to-earnings ratio is 41, but argues growth expectations support it. The article cites expectations for Nvidia revenue growth of 91% in the current quarter and 65% in 2027, and analyst-consensus growth figures for Taiwan Semiconductor of 47% this quarter and 35% next year. Bowman acknowledges warnings of a possible market pullback; his disclosure says he holds SMH and several of its underlying stocks.
