VanEck Semiconductor ETF Faces Fund Outflows Despite Positive Performance

VanEck Semiconductor ETF ( $SMH ) has risen by 2.66% in the past week. It has experienced a 5-day net outflow of $560.11 million.
This is due, in part, to market sentiment on some of the ETF’s largest holdings. For example:

• Nvidia Corporation is navigating a complex landscape as it modifies its H20 AI chips to comply with new U.S. export regulations to China. This move could open opportunities for competitors like Huawei, but Nvidia’s stronghold in the AI-chip market remains firm. Analysts are optimistic, projecting a 40% upside potential over the next year. Strategic partnerships, such as with Oracle, and technological advancements, like integrating Blackwell chipsets into Cadence’s supercomputers, bolster Nvidia’s market position. However, geopolitical risks from U.S.-China trade tensions pose potential challenges to its revenue and market access.
• Taiwan Semiconductor Manufacturing Company Limited (TSMC) has reported a significant increase in revenue, marking a 48.1% rise from April 2024. The company’s expansion in the U.S., particularly with a new chip plant in Arizona, is a strategic move to enhance domestic chip supply and reduce foreign dependence. This expansion aligns with the U.S. push for semiconductor self-reliance and has been well-received by investors, contributing to a 9.72% rise in TSMC’s stock price. Analysts maintain a strong buy consensus, reflecting confidence in TSMC’s robust market position and growth prospects.
• Broadcom Inc. has received a strong buy consensus from analysts, with a price target suggesting a 22.4% upside. The company is seen as a key player in the technology sector, with analysts maintaining a buy rating due to Broadcom’s strong market position and growth potential. The company’s shares are trading close to their 52-week high, reflecting positive market sentiment and investor confidence in Broadcom’s future performance.