VanEck Semiconductor ETF Sees Mixed Performance Amid Strong Fund Flows

VanEck Semiconductor ETF ( $SMH ) has fallen by 1.24% in the past week. It has experienced a 5-day net inflow of $117.61 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 recently due to its impressive Q2 earnings, which exceeded analysts’ expectations with record revenues of $46.7 billion. Despite this, the stock has seen a decline, possibly due to cautious revenue forecasts and geopolitical concerns, such as potential tariffs on U.S. chip sales to China. Analysts remain optimistic about Nvidia’s future, particularly due to its leadership in the AI chip market and potential growth in sectors like gaming and automotive. KeyBanc, Mizuho, and Truist have all raised their price targets for Nvidia, emphasizing its strong market position and growth prospects despite challenges like China export restrictions.
• Taiwan Semiconductor Manufacturing Company Limited (TSMC) is taking strategic steps to manage geopolitical risks by reducing its use of Chinese chipmaking equipment in its advanced plants. This move aims to comply with potential U.S. regulations and maintain access to subsidies and global markets. TSMC is also planning to market a system to manage trade secrets in Europe and the U.S. The company’s stock has seen mixed sentiment, with a slight decline in share price and increased demand for downside protection. Despite these challenges, TSMC remains a key player in the semiconductor industry, with a Strong Buy consensus rating from analysts.
• Broadcom Inc. is preparing to report its Q3 FY25 results, with expectations of significant growth driven by demand for AI-focused chips and networking gear. The stock has climbed significantly this year, and analysts remain bullish, expecting earnings and revenues to exceed consensus estimates. Broadcom’s strong position in custom AI chips and networking hardware is seen as a key driver for long-term growth, with major tech companies like Google and Meta contributing to its expanding hyperscaler pipeline. The company is expected to continue benefiting from the AI boom, with analysts maintaining a Strong Buy consensus rating for Broadcom stock.