VanEck Semiconductor ETF Faces Challenges Amid Fund Inflows

VanEck Semiconductor ETF ( $SMH ) has fallen by 3.48% in the past week. It has experienced a 5-day net inflow of $269.09 million.
This is due, in part, to market sentiment on some of the ETF’s largest holdings. For example:

• Nvidia Corporation has been in the spotlight as it prepares to report its Q1 FY26 earnings, with expectations of a 20% increase in earnings per share. Despite facing challenges like the China AI chip ban and supply issues, Nvidia’s strategic partnerships, such as with Navitas Semiconductor, and its expansion into new regions continue to strengthen its market position. Analysts remain optimistic about Nvidia’s long-term growth, maintaining a strong Buy rating. The company’s commitment to innovation is further highlighted by its efforts to develop ultra-efficient power systems for AI data centers.
• Taiwan Semiconductor Manufacturing Company Limited (TSMC) has made strategic financial moves, including acquiring NT$17.2 billion in fixed-income investments. The company is recognized for its advanced semiconductor technology and plays a crucial role in the global electronics supply chain. Despite some valuation concerns, TSMC’s strong revenue growth and leadership in AI demand are seen as significant strengths. Analysts maintain a Buy rating on TSMC stock, with a price target reflecting optimism about its long-term growth potential.
• Broadcom Inc. has experienced a significant share price surge, driven by strong AI capex spending among hyperscalers. Despite some trade-related pressures earlier in the year, Broadcom’s technological advancements, like the third generation of co-packaged optics, position it well for future growth. Analysts are confident in Broadcom’s role in supporting AI infrastructure, with a Strong Buy consensus rating and expectations of continued growth as hyperscalers expand their data center capabilities.