VanEck Semiconductor ETF

SMH and SOXX both track semiconductors but with different weighting schemes. SMH is more concentrated in its top holdings — NVDA and TSM often represent 15-20% of the fund — while SOXX is more equally weighted across the semiconductor value chain.

That concentration means SMH moves more like NVDA on most days, while SOXX gives a broader read on the entire chip sector.

SMH provides a liquid way to trade the AI hardware cycle without the single-stock event risk of owning NVDA or AVGO individually. Options on SMH are highly liquid and have lower implied volatility than individual chip options, making it easier to define risk.

Trend-following works well on SMH during expansion phases of the semiconductor cycle. When the 50-day moving average is rising and the ETF is above it, momentum tends to persist.

Semiconductors often lead the broader tech sector — chip stocks tend to turn before software and services because they are more cyclical and more sensitive to capex spending. If SMH is making new highs while QQQ is flat, the hardware cycle may be pulling tech higher.