SMH Stock Recent News

Recent developments have made the return/risk ratio from SMH far more attractive than that from the general tech sector represented by QQQM. The market has overacted to the near-term impacts from tariff rates while underestimating the secular growth potential for the holdings in SMH. The holdings in SMH play a foundational role in the exponential growth of our digital future, such as AI applications.

Based on an ideal impulse path lower, we expect the SOX to bottom around 3,253+/-70, and then rally back to $5,000-$5,700.

On this week's episode of ETF Prime, host Nate Geraci sat down with Roxanna Islam, head of sector & industry research at VettaFi. She offers insights on how the recent tariffs announcement could impact ETFs.

The ongoing tariff/ trade war and the higher recessionary risks may trigger a painful "wave of order cancellations through the supply chain," contributing to SMH's steep selloff. It remains to be seen if the AI spending trends and the ongoing data center capex boom may be durable, with it potentially impacting the semiconductor company's future performance. Even so, SMH remains attractive due to the top three holdings' cheap valuations and oversold status, compared to historical trends.

The recent correction in the stock market is making many investors uneasy. Amid several days of considerable sell-offs, shareholders are likely questioning past investments, and others may ask themselves whether they want to stay in the stock market at all.

President Trump's reciprocal tariffs have caused mayhem in semiconductor stocks. The established semi supply chain could be upended as Trump looks set to bring manufacturing prowess back to the US. TSMC as we know it might have to contend with a new order while working with Intel to remodel American semiconductor manufacturing.

On Monday, the Retail Sector ETF (NYSEARCA: XRT) went green. However, as I wrote last night, we still do not know if “in the current bearish phase, we know that short covering and premature buyers cause whipsaws.

Based on the Elliott Wave Principle, a countertrend rally to the $5,000-$ 5,700 range is developing, as five waves down are completing from the January high.

The VanEck Semiconductor ETF holds 26 positions, with a high concentration in top semiconductor companies like NVIDIA and TSMC. The ongoing AI revolution drives extraordinary growth in semiconductor demand, supported by massive capital expenditures from tech giants and rapid user adoption of AI technologies. Despite potential volatility, the SMH ETF offers a solid mix of equities to benefit from AI trends, though investors should be prepared for high volatility.

Semiconductor stocks have been under pressure but are consolidating, setting up for a potential uptrend resumption in 2025. SMH, a concentrated ETF with 25 semiconductor stocks, has outperformed peers over the last year. Strong earnings, particularly from NVDA, and ongoing demand for semiconductors support the investment thesis for SMH.