VanEck Semiconductor ETF Faces Challenges Amid Mixed Performance

VanEck Semiconductor ETF ( $SMH ) has fallen by 3.92% in the past week. It has experienced a 5-day net inflow of $704.05 million.
This is due, in part, to market sentiment on some of the ETF’s largest holdings. For example:

• Nvidia Corporation has been making significant strides as it heads into 2026 as the world’s most valuable company, largely due to its dominance in AI infrastructure. The company reported a record revenue of $57 billion for fiscal Q3, a 62% increase year-over-year, driven by the demand for its Blackwell-generation GPUs. With a $500 billion backlog of orders for its upcoming Blackwell and Rubin chips, Nvidia is well-positioned for continued growth. Despite concerns about a potential AI bubble, Nvidia’s stock has surged nearly 35% in 2025, and analysts maintain a Strong Buy consensus with a projected 43% upside potential for the stock.
• Taiwan Semiconductor Manufacturing Company Limited (TSMC) is experiencing mixed options sentiment, with shares seeing fluctuations and a higher-than-average options volume. Despite a slight decline in November sales, TSMC’s year-over-year sales increased by 24%, driven by strong demand for high-end mobile chipsets and AI sectors. Analysts remain optimistic about TSMC’s growth potential, particularly with ongoing AI investments and advancements in 3nm technology. The company’s valuation remains attractive, with potential for significant sales growth in 2026.
• Broadcom Inc. delivered strong quarterly results, beating Wall Street’s expectations on both revenue and earnings. However, the stock saw a significant drop of over 11% due to concerns about profit margins and its aggressive push into the AI chip market. Broadcom’s deep dependence on a few major AI customers and rising costs tied to its chip manufacturing partner TSMC have raised investor concerns. Despite these challenges, analysts maintain a Strong Buy consensus on Broadcom stock, with a potential 27.41% upside from current levels.