After 3 Years of Tracking AI Capex, These 3 Semiconductor ETFs Lead the Pack

After three years of hyperscaler capital spending feeding through to chip designers, foundry capacity, and lithography backlogs, the semiconductor ETF complex has separated into distinct buckets. iShares Semiconductor ETF (NASDAQ:SOXX), VanEck Semiconductor ETF (NASDAQ:SMH), and First Trust Nasdaq Semiconductor ETF (NASDAQ:FTXL) are the three broad U.S.-listed vehicles that capture the trade in clean, liquid form.

Details

These three ETFs offer broad exposure to the semiconductor sector, focusing on companies benefiting from the AI capex cycle. SOXX tracks the Philadelphia Semiconductor Index and holds 30 stocks including NVIDIA (NVDA), Lam Research (LRCX), and Micron (MU). SMH tracks the MVIS US Listed Semiconductor 25 Index and concentrates on large caps like NVIDIA and Taiwan Semiconductor. FTXL tracks the Nasdaq US Smart Semiconductor Index and uses a factor-based approach.

Context

Over the past three years, tech giants like Microsoft, Amazon, and Google have poured billions into AI infrastructure, boosting demand for advanced memory and processing chips. This spending has positively impacted semiconductor companies, making ETFs a preferred tool for investors to ride the trend without picking individual stocks.

What It Means for Investors

For investors seeking semiconductor exposure while mitigating single-stock risk, these three ETFs offer liquid, diversified options. Each fund differs in composition and weighting, so investors should review holdings and objectives before deciding.