VanEck Semiconductor ETF Sees Outflows Amid AI Volatility

VanEck Semiconductor ETF ( $SMH ) has fallen by 1.79% in the past week. It has experienced a 5-day net outflow of $602.73 million.
This is due, in part, to market sentiment on some of the ETF’s largest holdings. For example:

• Nvidia Corporation heads into its March 16–19 GTC conference under heavy Wall Street scrutiny, with investors looking for clues on new AI chips, Groq-powered inference products and the Vera Rubin and Feynman platforms that could extend its dominance in data‑center computing. Despite new rivals, including Chinese startup Lisuan and customer-designed chips from players like Meta, Nvidia is still seen as the premier AI infrastructure play.

  Analysts broadly rate the stock a Strong Buy, projecting roughly 48%–52% upside and arguing that NVDA trades at about 15 times expected 2027 EPS even as AI compute capacity is effectively “sold out.” Near-term share volatility, including modest year-to-date declines, contrasts with a roughly 50% gain over the past year and mounting optimism that GTC will restore confidence in Nvidia’s long-term AI growth story.

• Taiwan Semiconductor Manufacturing Company Limited shares remain volatile, with options activity pointing to elevated hedging but a modestly bullish tone, even as the stock has more than doubled over the past year. February revenue fell about 21% month-on-month due to Lunar New Year seasonality but jumped 22.2% year-on-year, leaving year-to-date sales up nearly 30% and reinforcing TSMC’s role at the heart of the AI chip cycle.

  Wall Street stays firmly positive, assigning Strong Buy-style ratings and price targets mainly in the $450–$470 range, implying meaningful upside from current levels despite a rich valuation near 32 times earnings. Analysts highlight surging demand for GPUs and AI-focused ASICs, early inventory builds in consumer chips and a stronger product mix, while higher energy costs and heavy global capex are seen as manageable given TSMC’s technology lead and robust balance sheet.

• Broadcom Inc. continues to emerge as a core AI infrastructure winner, with analysts citing its leadership in custom AI ASICs and networking chips that power hyperscale data centers. Recent quarterly results beat expectations, with revenue up about 29% year-on-year and strong demand for advanced 7nm/5nm AI silicon and Tomahawk switches, encouraging major brokers like Morgan Stanley and William Blair to reaffirm Buy ratings and lift price targets.

  The company has outlined a path to $100 billion in AI chip revenue by 2027, supported by custom-chip partnerships with six major tech firms, including Anthropic and big cloud providers. Broadcom holds a Strong Buy consensus and average price targets around $460–$470, suggesting roughly mid‑30% upside from current levels, as investors position it alongside Nvidia as a top beneficiary of sustained AI data‑center spending.